Jefferies Cuts Estimates and Price Targets on Airfreight & Surface Transport Segment

Jefferies is reducing its price targets and earnings estimates on companies within its transportation and logistics coverage due to weaker than expected volumes over the third quarter. The firm notes that lower fuel prices are offsetting the reductions slightly.

The firm’s estimates are 14 percent below the consensus for Canadian Pacific Railway (NYSE: CP) and around 10 percent below the consensus for Expeditors International of Washington (Nasdaq: EXPD) and Heartland Express Inc. (Nasdaq: HTLD). Jefferies believes that the downside is already priced into shares of CP and expects EXPD to report dwindling airfreight gross revenues. An analyst at Jefferies highlights that one third of HTLD’s operating income was derived from equipment gains on sale for the second quarter, something that is highly unlikely to happen two consecutive quarters in a row.

Jefferies sees possible upside in shares of Ryder System (NYSE: R) and Landstar System Inc. (Nasdaq: LSTR), but is not recommending a buy on shares of LSTR due to its current valuation. The firm doesn’t forecast any slowdown in Ryder’s short-term business.

An analyst at Jefferies comments, “LSTR was probably the only company we cover whose top-line growth appeared to actually accelerate year-over-year each month as the quarter progressed. We’d anticipate at least some further derivative tightness in flatbed capacity following Hurricane Irene.”

Jefferies is maintaining its Hold rating on shares of C.H. Robinson Worldwide (Nasdaq: CHRW), but is reducing its price target from $78 to $74. The firm is also lowering its EPS estimates for 2011 and 2012 from $2.71 and $3.11 to $2.66 and $2.97.

Jefferies is maintaining its Hold rating on shares of Canadian National Railway (NYSE: CNI), but is reducing its price target from $76 to $74. The firm is also lowering its EPS estimates for 2011 and 2012 from $4.96 and $5.43 to $4.82 and $5.30.

Jefferies is maintaining its Buy rating on shares of Canadian Pacific Railway (NYSE: CP), but is reducing its price target from $68 to $61. The firm is also lowering its EPS estimates for 2011 and 2012 from $3.02 and $4.39 to $2.93 and $4.08.

Jefferies is maintaining its Buy rating on shares of CSX Corporation (NYSE: CSX) and its price target of $27. The firm is lowering its EPS estimates for 2011 and 2012 from $1.73 and $1.95 to $1.72 and $1.95.

Jefferies is maintaining its Hold rating on shares of Expeditors International of Washington (Nasdaq: EXPD), but is reducing its price target from $50 to $49. The firm is also lowering its EPS estimates for 2011 and 2012 from $1.81 and $2.00 to $1.78 and $1.95.

Jefferies is maintaining its Buy rating on shares of FedEx Corporation (NYSE: FDX) and its price target of $110. The firm is tweaking its EPS estimates for 2012 and 2013 from $6.19 and $7.34 to $6.23 and $7.28.

Jefferies is maintaining its Hold rating on shares of The Greenbrier Companies (NYSE: GBX), but is reducing its price target from $18 to $17. The firm is also lowering its EPS estimates for 2011, 2012, and 2013 from $0.56, $1.43, and $2.27 to $0.50, $1.56, and $2.26.

Jefferies is maintaining its Hold rating on shares of Heartland Express Inc. (Nasdaq: HTLD) and its price target of $14. The firm is raising its EPS estimates for 2011 and 2012 from $0.78 and $0.80 to $0.79 and $0.83.

Jefferies is maintaining its Hold rating on shares of Knight Transportation (NYSE: KNX) and its price target of $15. The firm is tweaking its EPS estimates for 2011 and 2012 from $0.75 and $0.82 to $0.73 and $0.85.

Jefferies is maintaining its Hold rating on shares of Landstar System Inc. (Nasdaq: LSTR) and its price target of $43. The firm is tweaking its EPS estimates for 2011 and 2012 from $2.30 and $2.54 to $2.28 and $2.65.

Jefferies is maintaining its Hold rating on shares of Norfolk Southern Corp. (NYSE: NSC), but is reducing its price target from $79 to $76. The firm is also tweaking its EPS estimates for 2011 and 2012 from $5.11 and $5.67 to $5.13 and $5.65.

Jefferies is maintaining its Hold rating on shares of Quality Distribution (Nasdaq: QLTY), but is reducing its price target from $14 to $12. The firm is also lowering its EPS estimates for 2011 and 2012 from $0.74 and $0.88 to $0.72 and $0.86.

Jefferies is maintaining its Buy rating on shares of Ryder System (NYSE: R) and its price target of $66. The firm is tweaking its EPS estimates for 2011 and 2012 from $3.48 and $3.91 to $3.46 and $3.91.

Jefferies is maintaining its Buy rating on shares of FreightCar America (Nasdaq: RAIL) and its price target of $27. The firm is tweaking its EPS estimates for 2011 and 2012 from ($0.04) and $1.03 to ($0.05) and $1.03.

Jefferies is maintaining its Buy rating on shares of Union Pacific Corporation (NYSE: UNP) and its price target of $107. The firm is lowering its EPS estimates for 2011 and 2012 from $6.51 and $7.61 to $6.49 and $7.60.

Jefferies is maintaining its Buy rating on shares of UPS (NYSE: UPS), but is reducing its price target from $82 to $78. The firm is also tweaking its EPS estimates for 2011 and 2012 from $4.23 and $4.95 to $4.23 and $4.73.

Jefferies is maintaining its Hold rating on shares of UTi Worldwide (Nasdaq: UTIW), but is reducing its price target from $16 to $15. The firm is also tweaking its EPS estimates for 2012 and 2013 from $0.91 and $1.06 to $0.85 and $1.01.

Jefferies is maintaining its Hold rating on shares of Werner Enterprises Inc. (Nasdaq: WERN) and its price target of $24. The firm is raising its EPS estimates for 2011 and 2012 from $1.39 and $1.50 to $1.43 and $1.55.

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