Bank of America has revised its outlook for Old Dominion Freight Line Inc. (ODFL, Financial), adjusting the price target from $184 to $167 while maintaining a Neutral rating on the stock. The decision stems from ongoing concerns regarding a prolonged freight recession, which has prompted a recalibration of expectations.
The financial institution has also adjusted its earnings per share (EPS) predictions for the company. The estimates for 2025 and 2026 EPS have been decreased by 6% and 5%, setting them at $5.20 and $6.00, respectively. These adjustments reflect apprehensions about extended challenges in the freight sector impacting Old Dominion's future performance.
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 $171.21 with a high estimate of $215.00 and a low estimate of $135.00. The average target implies an upside of 11.73% 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: April 23, 2025
- Revenue: $1.37 billion for Q1 2025, a 5.8% decrease from the prior year.
- LTL Tons per Day: Decreased 6.3%, partially offset by a 2.2% increase in LTL revenue per 100 weight.
- Operating Ratio: Increased 190 basis points to 75.4% for Q1 2025.
- Cash Flow from Operations: $336.5 million for Q1 2025.
- Capital Expenditures: $88.1 million for Q1 2025; expected to total approximately $450 million for the year, reduced by $125 million from the initial plan.
- Share Repurchase Program: $201.1 million utilized in Q1 2025.
- Cash Dividends: Totaled $59.5 million in Q1 2025.
- Effective Tax Rate: 24.8% for Q1 2025, compared to 25.6% in Q1 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 high level of customer service with 99% on-time performance and a cargo claims ratio below 0.1%.
- The company improved its platform shipment per hour and P&D shipment per hour despite a 5% decline in LTL shipment per day.
- ODFL's yield management strategy continues to be effective, with a 2.2% increase in LTL revenue per 100 weight.
- The company has a strong cash flow from operations totaling $336.5 million for the first quarter of 2025.
- ODFL has maintained its market share and is well-positioned to capitalize on future economic improvements due to its disciplined approach and strategic investments.
Negative Points
- Revenue for the first quarter of 2025 decreased by 5.8% compared to the prior year, reflecting a challenging economic environment.
- The operating ratio increased by 190 basis points to 75.4%, indicating a deleveraging effect on operating expenses due to decreased revenue.
- ODFL experienced a 6.3% decrease in LTL tons per day, contributing to the overall revenue decline.
- The company reduced its 2025 capital expenditure plan by $125 million, indicating a cautious approach due to economic uncertainty.
- There is ongoing uncertainty in the macroeconomic environment, which may delay a full recovery in business trends.
