Landstar System, Inc. (LSTR) is currently mired in multiple headwinds, which, we believe, have made it an unimpressive investment option.
Let’s delve deeper.
Southward Earnings Estimate Revision:The Zacks Consensus Estimate for third-quarter 2024 earnings has been revised 11.9% downward over the past 90 days. For 2024, the consensus mark for earnings has moved 7.5% south in the same time frame. The bearish alterations in estimate revisions underscore a notable decline in brokers' confidence in the stock.
Weak Zacks Rank and Style Score:Landstar currently carries a Zacks Rank #5 (Strong Sell). The company’s current Value Score of F shows its unattractiveness.
Unimpressive Price Performance: Shares of LSTR have lost 4.8% over the past six months compared with the industry’s decline of 16%.
Image Source: Zacks Investment Research
Earnings Expectations: Downbeat earnings expectations cast a shadow over a company’s prospects. For third-quarter 2024, LSTR’s earnings are expected to decline 11.70% year over year. For 2024, LSTR’s earnings are expected to decline 19.16% year over year.
Other Headwinds: Landstar is being hurt by weak freight conditions. The top line has been suffering mainly due to the below-par performance of all its segments. Revenues are likely to be weak going forward. LSTR expects third-quarter 2024 truckloads to decline in the range of 6-10% on a year-over-year basis.
Weakness in overall volumes due to headwinds like weak freight conditions, supply-chain woes and slower network velocity are hurting the top line. The trucking industry has been continuously facing driver shortages. As old drivers retire, trucking companies find it difficult to hire drivers since the job does not appeal to the younger generation.
Stocks to Consider
Some better-ranked stocks from the Zacks Transportation sector are Wabtec Corporation WAB and Kirby Corporation KEX. Each stock presently carries a Zacks Rank of 2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Wabtec has an impressive earnings surprise history. The company's earnings outpaced the Zacks Consensus Estimate in three of the trailing four quarters (missed the mark in the remaining quarter), delivering an average surprise of 11.83%.
The Zacks Consensus Estimate for WAB’s 2024 earnings has been revised 3.3% upward over the past 90 days. WAB has an expected earnings growth rate of 25.34% for 2024. Shares of WAB have gained 22.5% so far this year.
KEX has an impressive earnings surprise history. The company's earnings outpaced the Zacks Consensus Estimate in each of the trailing four quarters, delivering an average surprise of 8.73%.
KEX has an expected earnings growth rate of 44.35% for 2024. The Zacks Consensus Estimate for KEX 2024 earnings has been revised 1.5% upward over the past 90 days. Shares of KEX have surged 48.4% so far this year.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
