Jefferies Initiates Coverage On UTI Worldwide With A Hold Rating

Jefferies has initiated coverage on UTI Worldwide UTIW with a Hold rating and $23/share PT. The non-asset-based and asset-light logistics names were the great EPS and share price compounders of the 1990s and 2000s among the transport stocks. And while Jefferies thinks that baton has passed to the rails, it still believes the logistics stocks are a great place to be for the long run. As described throughout our initiation materials this morning, we believe the freight cycle will hit its first stage of maturation around mid-2011 — with TL carrier load and yield growth starting to come up short against high-end consensus expectations. This is typically the first sign that the freight cycle is shifting gears, and the point at which investor rotation into the logistics group starts to accelerate. Industry trends should start to accelerate in the logistics group's favor around mid-2011, in our view. Restructuring/integration risk is a company-specific headwind at UTIW. UTIW closed Thursday at $19.75