Landstar System Inc.’s stock is traveling at ‘ludicrous’ speed after a series of bullish analyst calls including one with references from the movie “Spaceballs.”
Shares of the truckload carrier climbed the most in nearly a month, up as much as four percent intraday after Stifel analyst J. Bruce Chan cited a “robust freight environment” in his note entitled, “The Schwartz is in You, Landstar; Going Plaid and Upgrading to Buy”. The title appears to be a homonymous play on the movie’s main character’s name, Lone Starr, and the optics that result in the movie when traveling at “ludicrous speed,” a pace which exceeds the speed of light in the Star Wars parody by Mel Brooks.
Landstar can distinguish itself from peers with its strong pipeline for new agents—who ultimately drive volume through its network, wrote Chan.
Analysts from Morgan Stanley and Oppenheimer also shifted their outlook on the company following second quarter earnings results July 25, raising their third quarter estimates. Oppenheimer analyst Scott Schneeberger wrote that strong demand and tight industry-wide truck capacity will continue to create favorable business conditions. While the market appreciates the favorable demand and supply dynamics, “we’d seek to be opportunistic at advantageous entry points,” he said.
While Landstar missed on second quarter operating income, the company’s performance wasn’t reflective of the numbers, according to Chan. That’s because elevated insurance and claims weighed on margins.
A lower tax rate for the freight carrier was another tailwind for the company in the second quarter, Morgan Stanley analyst Ravi Shanker wrote in a note upping the carrier’s price target to $98 from $96. Shanker increased third quarter earnings estimates by 18 cents to $1.58, though remains one of the two analysts with a sell on the company, according to data compiled by Bloomberg.