Piper Jaffray Raising 2010 Estimates On Old Dominion Freight (ODFL)

Piper Jaffray is out with a research report this morning and is reiterating its Overweight rating and $43 price target on Old Dominion Freight ODFL. In the research report, Piper Jaffray writes, "ODFL is scheduled to report 2Q10 EPS on Wednesday, July 28th, before the market. We've raised our 2Q10 EPS estimate to $0.50, which compares to current Consensus of $0.45. The majority of our increased 2Q10 EPS assumption is based on tonnage growth and ODFL realizing significant operating leverage – we're assuming a 2Q10 OR of 90.4% (280bp of y-o-y expansion vs. 170bp of expansion during 1Q10). Our yield (price) projection (net of fuel surcharge y-o-y benefit) is down modestly for 2Q10 on a y-o-y and sequential basis. We continue to believe LTL industry pricing has likely bottomed, however price recovery will be a gradual process. We reiterate our Overweight rating." Piper Jaffray goes on to say, "Reiterating Overweight and $43 price target. We believe ODFL is the best way to play improving fundamentals within the LTL sector (which likely has less pricing power / price upside versus other modes of Transportation, specifically TL, where yields / price are already inflecting). ODFL potentially has more operating leverage than its competition, given lesser yield and cost adjustments during the downturn / upped market competition."