Saia To Gain From Issues At Yellow Corp Amid Solid Profitable Mix, New Terminals: Analyst

Benchmark analyst Christopher Kuhn reiterated a Buy rating on Saia, Inc SAIA, raising the price target to $450 from $330.

The analyst sees an opportunity for Saia to continue improving productivity in 2023 and increase yield as they benefit from issues at Yellow Corporation YELL in this still challenging freight environment. 

While the weight and revenue per shipment might be lower on this volume, rev/cwt is higher, and the company will continue to focus on a profitable mix, the analyst adds.

SAIA recently reported Q2 results where revenue was $694.6 million, a 6.8% decrease Y/Y.

The results exceeded estimates and showed strong cost execution, effective mix management, solid pricing, and an opportunity to capture volume due to disruption in the industry, the analyst notes.

Kuhn thinks Q2 once again showcased the success of management’s long-term strategy, allowing them to take a profitable share. 

Saia added five new terminals this year, including its third one in the Atlanta metro area, and is on track to open 3 or 4 more this year, Kuhn notes. 

The increased terminals are expanding service as the company continues to develop the markets around the 20-plus terminals opened over the last two years, adds the analyst. 

Based on the above, the analyst raised 3Q 2023 estimate to $3.25 from $3.18.

Kuhn increased 2023 EPS estimate to $12.55 from $12.24. 

For FY24, the estimate is now $14.27 versus $14.03. 

Price Action: SAIA shares are trading lower by 0.64% to $423.17 on the last check Monday.

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