TFI International To See Soaring Volume Stemming From Potential Restructuring Of Yellow Corp: Analyst
Portfolio Pulse from Nabaparna Bhattacharya
BMO Capital Markets analyst Fadi Chamoun has reiterated the Market Perform rating on TFI International Inc. (TFII), raising the price target to $125 from $105. This is due to the potential restructuring of Yellow Corporation (YELL), which could result in lower industry capacity and freight diversion to other LTL networks. TFII is expected to benefit from this disruption, with potential valuation up to $150 in a YELL bankruptcy scenario. However, TFII's FY23 revenues are expected to fall 13.2% to $7.65 billion, with adjusted EPS slumping 17.6% to $6.61.
July 25, 2023 | 6:33 pm
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NEGATIVE IMPACT
YELL's potential restructuring could result in lower industry capacity and freight diversion to other LTL networks. In a bankruptcy scenario, the volume and price impact may be more significant.
The potential restructuring of YELL could result in lower industry capacity and freight diversion to other LTL networks. In a bankruptcy scenario, the volume and price impact may be more significant, which could negatively impact the stock price.
CONFIDENCE 90
IMPORTANCE 90
RELEVANCE 100
POSITIVE IMPACT
TFII's price target has been raised to $125 from $105 due to potential benefits from YELL's restructuring. However, FY23 revenues are expected to fall 13.2% to $7.65 billion, with adjusted EPS slumping 17.6% to $6.61.
The potential restructuring of YELL could result in lower industry capacity and freight diversion to other LTL networks, which TFII is well-positioned to capitalize on. This has led to a raised price target for TFII. However, the company's FY23 revenues are expected to fall, which could negatively impact the stock price.
CONFIDENCE 90
IMPORTANCE 80
RELEVANCE 100