Goldman Sachs has revised its price target for Old Dominion Freight Line, Inc. (ODFL, Financial), reducing it from $192 to $190 following the company's first-quarter financial results. The firm has maintained its Neutral rating for the stock despite the adjustment.
The decision comes as Old Dominion demonstrated stronger expense leverage than anticipated, with its earnings before interest and taxes (EBIT) exceeding Goldman Sachs' estimates by 4%. This improvement was largely attributed to lower-than-expected costs in salaries and wages, purchased transportation, and insurance. However, these gains were somewhat offset by an increase in operating supplies expenses.
Investors are advised to consider these developments as they assess the performance and future potential of Old Dominion shares. The company’s ability to manage expenses effectively will be crucial in navigating market challenges moving forward.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 20 analysts, the average target price for Old Dominion Freight Line Inc (ODFL, Financial) is $181.41 with a high estimate of $240.00 and a low estimate of $135.00. The average target implies an upside of 18.39% from the current price of $153.23. More detailed estimate data can be found on the Old Dominion Freight Line Inc (ODFL) Forecast page.
Based on the consensus recommendation from 25 brokerage firms, Old Dominion Freight Line Inc's (ODFL, Financial) average brokerage recommendation is currently 2.7, indicating "Hold" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for Old Dominion Freight Line Inc (ODFL, Financial) in one year is $190.42, suggesting a upside of 24.27% from the current price of $153.23. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the Old Dominion Freight Line Inc (ODFL) Summary page.
ODFL Key Business Developments
Release Date: February 05, 2025
- Revenue: $1.39 billion for Q4 2024, a 7.3% decrease from the prior year.
- Earnings Per Diluted Share: $1.23, a 16.3% decrease compared to the same period a year ago.
- Operating Ratio: Increased 410 basis points to 75.9% for Q4 2024.
- Cash Flow from Operations: $401.1 million for Q4 and $1.7 billion for the year.
- Capital Expenditures: $170.9 million for Q4 and $771.3 million for the year.
- Share Repurchase Program: $142.5 million for Q4 and $967.3 million for the year.
- Cash Dividends: $55.4 million for Q4 and $223.6 million for the year.
- Effective Tax Rate: 21.5% for Q4 2024, compared to 24.1% in Q4 2023.
- Service Centers Opened: Four new service centers in 2024.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Old Dominion Freight Line Inc (ODFL, Financial) maintained a consistent market share despite a 7.3% revenue decline, showcasing strong customer relationships.
- The company achieved 99% on-time service and a cargo claims ratio below 0.1%, highlighting its operational efficiency and reliability.
- ODFL continued to invest in its network, technology, and workforce, with $771 million spent on capital expenditures in 2024, including the opening of four new service centers.
- The company reported a 4.5% increase in LTL revenue per hundredweight in January, indicating effective yield management.
- ODFL's Board of Directors approved a 7.7% increase in the quarterly dividend, reflecting confidence in the company's financial stability.
Negative Points
- ODFL experienced a 16.3% decrease in earnings per diluted share compared to the same period a year ago, impacted by lower volumes.
- The company's operating ratio increased by 410 basis points to 75.9% in Q4 2024, due to revenue decline and increased overhead costs.
- ODFL's LTL tons per day decreased by 8.2% in the fourth quarter, reflecting ongoing softness in the domestic economy.
- The company faced higher depreciation costs due to ongoing investments, creating short-term headwinds to overhead expenses.
- ODFL's insurance and claims expense increased by 100 basis points as a percent of revenue, primarily due to adjustments from an actuarial review of accident claims.
