Dahlman Rose Has Buy On Knight Transportation (KNX)

Dahlman Rose & Co. has a Buy rating and a $24 price target on shares of Knight Transportation KNX after the company reported earnings. In a note to clients, Dahlman Rose writes, "Knight reported 4Q10 EPS of $0.17. However, the quarter included a non-cash $2.5 MM pre-tax ($2 MM after tax) stock compensation charge, without which EPS from continuing operations came in at $0.19, just shy of our and the consensus estimate of $0.20. Revenue grew 12.2% y/y to come in at $188.3 MM vs our and consensus estimates of $194 MM and $187 MM, respectively. Excluding fuel, revenue increased 9.8% to $158 MM." Dahlman Rose goes on to say, "We are maintaining our 2011 and 2012 EPS estimates of $1.00 and $1.15, respectively. Our $24 price target, which is based on 20.5x our 2012 EPS, remains unchanged (the 5-year average is around 25x from 2005-2010 – we note that we disregard 2009 due to it being an outlier recession year). We maintain our Buy rating and believe the company continues to offer good value for the patient investor. In fact, we believe the overall truckload industry should see the benefits of significantly improved pricing toward mid 2011 as the recovery continues and capacity remains unlikely to come back." Shares of KNX gained 33 cents today to close at $19.33, a gain of 1.7%.