Dahlman Rose Reiterates Buy Rating on Saia Inc. (SAIA)

Dahlman Rose & Co. is out with a research report this morning, where it reiterates its buy rating on Saia Inc. SAIA; it has a $20.00 price target on the stock. The Dahlman analysts cited the company’s recent earnings report, which beat estimates; revenues in creased 6% year over year, tonnage grew by 4%, and total yields improved by 2%. The analysts also noted that SAIA’s operating ration broke 1005 for the first time in five quarters, improving by 260 basis points, to $97.5%. In addition to the improving trends in the quarter, management credited cost reduction efforts taken at the beginning of the year that are on pace to save SAIA $6 million on an annualized basis. As for estimates, the Dahlman analysts said, “Considering the better-than-anticipated 2Q10 results and improving LTL industry trends, we are increasing our 2010 and 2011 EPS estimates to $0.25 and $1.50 from $0.15 and $1.45 respectively. Our price target remains unchanged at $20 as we have chosen to continue to apply a 13.5x multiple on our 2011 EPS estimate (we note that the company’s midpoint multiple over the last five years with positive earnings is 14.4x).” They continue to recommend the Georgia-based carrier’s shares for investors who wish to have exposure to the less-than-truckload segment of the trucking industry.