Piper Jaffray Initiates Coverage on Arkansas Best (ABFS) with an Underweight; Pricing Finally Tips Risk/Reward Balance in N-T
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Piper Jaffray & Co. initiates coverage on Arkansas Best (Nasdaq: ABFS) with an Underweight rating. Price target $20.
Piper analyst says, "We believe recently lowered near term EPS expectations remain too high. In our view pricing pressures could exceed the market's expectations and ABFS's less flexible cost structure makes it more sensitive. Our below-consensus EPS estimates reflect lower yields and higher wage costs associated with ABFS's union labor force...Pricing finally tips risk/reward balance in near term. Industry pricing has suffered due to (1) a severe economic downturn and (2) increased pricing competition by a few LTL carriers trying to take incremental market share ahead of market leader YRC Worldwide (Nasdaq: YRCW) potentially filing for bankruptcy. We believe that LTL pricing has likely become incrementally more competitive versus market expectations. Given no real improvement in demand (stabilized), limited visibility, and increased pricing competition we believe ABFS could take a step back in the near term."
To see more analyst ratings on ABFS Click Here.
Arkansas Best Corporation, through its subsidiaries, engages in motor carrier freight transportation business in the United States.
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