Wednesday, May 26, 2010

Con-Way (NYSE:CNW): Better Days on the Horizon; Upgrading to Outperform - RCB

RBC Capital is upgrading Con-Way (NYSE:CNW) to Outperform from Sector Perform while raising their target to $44 (prev. $38).

- While the LTL space still has a long road to hoe with regards to solving its excess capacity dilemma, fundamentals have begun to materially improve.

- During the 1Q'10 earnings season, most LTL carriers reported y/y tonnage improvements in each month of the quarter with these trends significantly accelerating in March and April, a trend that continued into May.

- RBC believes that the company's operating losses are in its rearview mirror. Management has been vocal of late stating that volumes were up 37% y/y in April and up 30% y/y so far in May. Additionally, management has stated that it was profitable in April.

- Recent channel checks confirm their belief that the industry as a whole has found religion with regards to taking freight rates higher. They believe that CNW is beginning to gain traction with regards to price and will begin to see y/y yield improvement as it works through contract negotiations this bid season.

- CNW has a material amount of operating leverage in its model and once this re-priced freight begins to trickle in RBC believes the carrier could see some significant upside to estimates. Remember, the company is already absorbing the cost of running a much larger network and can handle a significant increase in volumes without layering in a material amount of expense.

The recent pullback in the stock price has provided a much more attractive entry point into the name. Given the magnitude of operating leverage in the LTL business model coupled with the improving macro environment, they believe now is the time to layer on more aggressive LTL exposure, thus their upgrade of CNW to go along with their previous Outperform rating on Old Dominion Freight Line (ODFL).

All in, RBC believes that the company has weathered the storm and that it stands to be one of the few standouts in the LTL space once the recovery is in full swing. Most compelling is the fact that CNW has a lot of operating leverage in its model and once its re-priced freight begins to trickle in they believe the carrier could generate some significant upside to estimates. Remember, the company is already absorbing the cost of running a much larger network and can handle a significant increase in volumes without layering in a material amount of expense. With that said, they do caution that recovery in the LTL space could take time as a significant amount of excess capacity exists. However, they believe that CNW has taken the necessary measures to position itself better than most in the LTL space and will likely be rewarded quicker than most once a more robust recovery commences. With that said, RBC reminds investors that the time to own these names is well ahead of a recovery.

Notablecalls: Gutsy upgrade by RBC's team as this is a very economically sensitive sector.

The stock, CNW is prone to big swings on analyst rating changes so I would not be surprised CNW trade to $34 kind if the market doesn't fall apart on us again.

Worth watching.

I think the whole space was held back yesterday following the carnage in Arkansas Best (ABFS) - see below.

17 comments:

Stefan Carl said...

StudentsAssignmentHelp.com provides Australia proofreading services in which students get proofreading services from the experts who have 10 years of experience of assignment writing in Australia.

customerservicehelpnumber said...

Ohhh! Wow, post. I like it. You choose exactly what I wanted to read. Kindle post some more topics like traveling. I am eager to read your ner post. If you are using Outlook and need and help and information then visit on my Outlook customer service web page. You may also dial our Outlook support phone number for quick assistance.
Here are some frequently asked questions of Outlook:
Is there a phone number for Outlook support?
How do I contact outlook by phone?
Thanks

Online Technical Help said...

Incredible blog! The post is extremely helpful for office 365 users to get the details about Office 365 Support. The excellent blog is the right place to get ideas about quick Microsoft Office 365 Support. Thanks for sharing this post!
outlook Support Phone number
outlook Support
outlook Support number
Microsoft outlook Support
outlook technical Support Phone number
outlook Tech Support Phone number
Outlook Send Receive Error
outlook send/receive error
Microsoft office 365
office 365
What Is Microsoft Office 365
0x80070002
error 0x80070002
error code 0x80070002
Outlook Error 0x80070002
Error code 30088-4

Microsoft Support said...

The mentioned points in this guide are very informative and helped me to resolve my issue in a very proficient manner. At the time of solving my query I got stuck at one point, so I called at outlook Support Phone number and the technician who answered my call guided me thoroughly to get rid of my issue. I really appreciate the hardworking of that guy, who helped me during my crisis of time and never leave my side until problem didn’t get resolved. Therefore, I personally suggest everyone to get hold of Microsoft outlook Support if you really want to resolve your query related to your Outlook.
How do I call Outlook support?
Is there a phone number for Outlook support?
How do I contact Hotmail Support?
Is there a phone number for Hotmail support?
Change Hotmail Password
hotmail change password
change microsoft password
Is There A Phone Number For Microsoft Windows Support?
How Do I Contact Microsoft Windows Support?
How to Contact Microsoft Windows Tech Support?
How Do I Contact Microsoft Office 365 Support?
Is There a Phone Number for Microsoft Office 365 Support?
Is There a Phone Number for Microsoft Office Support?
How Do I Contact Microsoft Office Support?

Lucas Mark said...

https://8tracks.com/lucasmarkop
https://apache-gui.com/forum/profile.php?mode=viewprofile&u=3097
https://www.consultancyregister.com/consultants/8208/Comcast-email-set
https://express.yudu.com/profile/1308513/lucasmarkop
https://www.110designs.com/profile/16142-lucasmarkop

allewatson said...

We are working as public beneficiaries as we share analyzed and evaluated solutions with people who are looking for a good solution on centurylink email login. If you are also looking for such assistance. You can either go to our website or contact us via call.

McAfee Login said...

We are a team of highly experienced and well trained, those who provide a solution related to McAfee such as McAfee Activate or mcafee.com/activate or www.McAfee.com/Activate Product Key.

Gb said...

If you are looking for Online Grocery Shopping, then download Bazaar Durgapur app from playstore. Get your grocery items at your doorsteps. Opt for Combo offers for bigger discount.

camila smith said...

cash app refund ||will venmo refund money if scammed ||zelle refund ||apple pay refund || paypal refund ||amazon refund || ebay refund || where's my refund facebook

camila smith said...

How to get a refund on Cash App if sent to wrong person?
HOW TO GET A REFUND ON CASH APP IF SENT TO WRONG PERSON?
How to get a refund on Cash App
Cash App Refund Policy – Cash App
How to Get a Refund on Cash App
How to check cash app card balance
how to check cash app card balance
how to check cash app card balance

how to check cash app card balance - QR Code

camila smith said...

cash app refund
cash app refund phone number
will cash app refund money if scammed
how to get a refund on cash app
can you get a refund on cash app
cash app refund
cash app refund phone number
will cash app refund money if scammed
how to get a refund on cash app

camila smith said...

cash app refund
refund on cash app
cash app refund policy
cash app refund phone number
cash app refund
refund on cash app
cash app refund policy
cash app refund phone number

clara smith said...

Very interesting post, but you can also check out some latest blog on how to increase cash app limit.

johnsmith said...



If you are a cash app customer and are facing an issue, How to dispute a charge on cash app, Please read my blog
Cash app dispute process


Smart Marketing said...

Don’t worry if you are one of those users who are looking forward to knowing everything about the right way to Reset My ATT Net Email Password on your own?To do so in a trouble-free manner,you will have to take the necessary assistance and guidance through which you will be able to get your password reset without any kind of problems and hurdles.For more information and guidance, you have to go to the official website without any kind of delay.

johnsmith said...

How to check American express gift card balance ?
If you can't check your American express gift card balance. Follow these steps to check American express gift card balance

Unknown said...

Hi, my name is Mitali and I am a professional DSLR camera expert, dedicated to providing the best camera assistance to individuals of all backgrounds. If you find the best camera under 1 lakh, but feel overwhelmed by the endless options and technical specifications, then look no further. I can offer valuable advice on everything from beginner models to high-end professional equipment.