Why Forward Air Shares Are Diving Today

Forward Air Corp FWRD shares are diving by over 27% after several analysts downgraded the stock following the business combination announcement with Omni Logistics, LLC.

Yesterday, Forward Air disclosed its decision to combine with Omni Logistics, LLC through a definitive cash-and-stock transaction.

Raymond James downgraded the stock to Market Perform from Strong Buy. 

The analyst Patrick Tyler Brown is bearish on this deal as he believes combining the companies will risk top-line diversions (given FWRD’s shift to the retail vs. wholesale channel), significantly leverage the balance sheet in the short term, and lacks near-term earnings accretion.

The analyst estimates non-GAAP EPS of $4.55 for 2023 and $5.75 for 2024.

Also, Wolfe Research lowered the rating to Underperform from Peer Perform, and Stifel reduced the rating to Hold from Buy at a lowered price target of $103 from $127.

Also Read: Forward Air Unveils Intermodal Drayage Expansion: Linden, NJ Operations To Service Port Newark

Price Action: FWRD shares are trading lower by 27.9% at $74.98 on the last check Friday.