Buy Rating Affirmed for TFI International on Attractive Valuation and Growth Prospects

Goldman Sachs analyst Jordan Alliger has maintained their bullish stance on TFII stock, giving a Buy rating today.

Jordan Alliger has given his Buy rating due to a combination of factors including the company’s attractive valuation and potential for cyclical recovery. Alliger recognizes that despite a softer start to 2024, TFI International is still valued compellingly at 14.5 times the projected earnings for 2025. The expectation of a cyclical upturn is anticipated to increase volumes and margins, which bodes well for the company’s financial performance. Furthermore, Alliger is optimistic about the company’s specific initiatives aimed at improving less-than-truckload (LTL) efficiencies, such as service quality, tonnage/density, pricing, and linehaul optimization.
Moreover, Alliger underscores the strategic mergers and acquisitions, particularly the integration of DSKE, which concluded on April 1st. This acquisition is expected to contribute to TFI International’s scale in specialized trucking and presents opportunities to enhance the operating ratio with the new business. While acknowledging a year-over-year decline in yields, Alliger notes the moderation in this decline and management’s focus on continued improvement. He draws a parallel to XPO Logistics’ past situation, suggesting that TFI International is poised to replicate a similar trajectory of improvement and growth.

According to TipRanks, Alliger is a 4-star analyst with an average return of 8.9% and a 54.04% success rate. Alliger covers the Industrials sector, focusing on stocks such as United Parcel, TFI International, and JB Hunt.

In another report released today, National Bank also upgraded the stock to a Buy with a C$217.00 price target.

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TFI International (TFII) Company Description:

TFI International, Inc. provides freight transportation and logistics services. It operates through the following segments: Package & Courier, Less-Than-Truckload, Truckload, and Logistics. The Package & Courier segment engages in pickup, transport, tracking and delivery of items across North America. The Less-Than-Truckload segment offers pickup, consolidation, transport and delivery of smaller loads. The Truckload segment includes expedited transportation, flatbed, container and dedicated services. The Logistics segment provides asset-light logistics services. The company was founded in 1957 and is headquartered in Saint-Laurent, Canada.