Raymond James Cuts Forward Air Price Target By 7%

Raymond James analyst Patrick Tyler Brown lowered the price target for Forward Air Corp FWRD to $135 (an upside of 50%) from $145 while maintaining the Strong Buy rating on the shares.
The analyst states that the sharp decline in truck spot rates has continued to dominate headlines — as per data, it is estimated that current truck spot rates per mile have fallen back to "peak" 2014 levels.
Brown believes that the truck spot market has been at the epicenter of a well-documented shift from goods to services spending — all while truckload operating costs have increased starkly.
The analyst maintains the rating reflecting on a strong mid-quarter update that exhibited exceptional pricing, tonnage holding its own, and an expectation that they will beat the high end of their guidance range.
Brown continues to be impressed with FWRD's efforts to improve revenue quality by removing loose/over-sized/non-palletized freight in favor of higher-value/denser freight.
He adds that its asset-light approach provides an appealing FCF profile, resulting in a good risk/reward skew.
Price Action: FWRD shares are trading higher by 2.38% at $89.45 on the last check Friday.

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