UPDATE: Stephens Upgrades Saia Inc. (SAIA) to Overweight

(Updated - April 7, 2021 6:26 AM EDT)

Stephens analyst Jack Atkins upgraded Saia Inc. (NASDAQ: SAIA) from Equal Weight to Overweight, PT $295.00 (from $230.00).

The analyst comments "We downgraded SAIA to EqualWeight last year post the Company's F4Q results and, needless to say, that was not a great call on our part. While we acknowledge that the stock is expensive, there is a scarcity value with SAIA (and ODFL) that we have trouble finding elsewhere on our coverage list. Namely, there is a cyclical organic growth story here as the Company executes on its terminal expansion strategy over the next 5+ years that should allow SAIA to take market share through cycles. In addition, as it becomes a larger national LTL provider, we believe SAIA will be well positioned to not only follow along with constructive pricing for the broader LTL sector, but drive above market price growth as it closes the ~20% gap between its revenue per shipment and its non-union peers. Over the next five year we believe a low-80s Operating Ratio is achievable for SAIA (vs. ~90% in 2020), which we think would allow the Company to earn ~$15/share in 2025. Assuming a P/E multiple range of 25x-30x and a discount rate of 10% that would imply the stock is worth ~$270- $325 in one year or +13%-36% from current levels. Our new $295 price target assumes the mid-point of these ranges. While this stock isn't for everyone, we do think that long-term investors are increasingly drawn to SAIA given its market cap (just north of $6 bil.) and growth potential over the next 3-5 years. There were a number of investors who missed ODFL a decade ago, and we think the fear of missing out on what could be another ODFL-like story in the LTL sector will continue to attract capital to this stock, and limit downside in broader market pullbacks, so long as the Company continues to execute on its growth and pricing initiatives."

For an analyst ratings summary and ratings history on Saia Inc. click here. For more ratings news on Saia Inc. click here.

Shares of Saia Inc. closed at $228.67 yesterday.

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