TFI International: Hold Rating Amid Earnings Miss and Macroeconomic Challenges

Fadi Chamoun, an analyst from BMO Capital, reiterated the Hold rating on TFI International (TFII – Research Report). The associated price target was lowered to $88.00.

Fadi Chamoun has given his Hold rating due to a combination of factors impacting TFI International’s performance. The company reported a first-quarter earnings miss, with adjusted EPS and EBIT falling significantly below consensus expectations. This underperformance, coupled with a challenging macroeconomic environment, has led to a downward revision of EPS estimates for the upcoming years. Despite these challenges, the stock’s positive reaction suggests a disconnect between market expectations and the company’s current performance.
Moreover, management’s guidance for the second quarter assumes typical seasonality and the realization of self-help opportunities, which may not materialize given the uncertain macroeconomic conditions. While there are initiatives in place to improve margins and revenue quality, the current valuation levels suggest a balanced risk/reward scenario. Additionally, the company’s capital allocation strategy, focusing on share repurchases and deferring M&A activities, reflects a cautious approach amid the prevailing uncertainties. These factors collectively justify the Hold rating as the company navigates through these challenges.

In another report released on April 14, Stifel Nicolaus also maintained a Hold rating on the stock with a $105.00 price target.

Based on the recent corporate insider activity of 47 insiders, corporate insider sentiment is positive on the stock. This means that over the past quarter there has been an increase of insiders buying their shares of TFII in relation to earlier this year.