Jason Seidl, an analyst from TD Cowen, reiterated the Buy rating on Covenant Logistics Group. The associated price target was lowered to $30.00.
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Jason Seidl has given his Buy rating due to a combination of factors tied to Covenant Logistics Group’s ongoing strategic repositioning and improving fundamentals. Despite a modest earnings miss driven by a government shutdown and an outsized insurance claim, he views these as largely transitory headwinds rather than structural issues. Management is actively pruning unprofitable freight in the Expedited segment, continuing to shrink and optimize that fleet while implementing rate increases that are already trending in the low- to mid-single digits for early 2026. Seidl expects these actions, combined with healthier bid activity across both main business units, to support gradual margin expansion from the current trough levels.
In Dedicated, Covenant is growing higher-value, specialized agriculture and other niche freight, which is boosting revenue per tractor and margins even as it pulls back from more commoditized lanes. While this mix shift and the associated capital spending will pressure capex in 2026, Seidl believes the earnings impact will be positive over time. He also views the acquisition of Star Logistics as a strategically sound move into asset-light operations focused on specialized emergency-response freight, with management guiding to accretion in the first half of 2026 even if margins are initially diluted. Taken together, the portfolio upgrades, improving rate environment, and targeted growth in higher-margin niches underpin his view that the current valuation offers attractive upside to his $30 price target, justifying a Buy rating.
Seidl covers the Industrials sector, focusing on stocks such as CSX, Hub Group, and Landstar System. According to TipRanks, Seidl has an average return of 21.9% and a 67.91% success rate on recommended stocks.