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Here's Why Investors Should Give Werner (WERN) a Miss Now
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Werner Enterprises, Inc. (WERN - Free Report) is mired in multiple headwinds, which, we believe, have made it an unimpressive investment option.
Werner is suffering from weak freight demand. Due to the weakness, WERN reported lower-than-expected earnings per share in each of the first three quarters of 2023. As a result, management lowered its 2023 guidance for growth in the Truckload Transportation Services or TTS segment. It anticipates TTS truck growth between (3%) and (5%) (prior view: (2%) to (4%)).
Moreover, high operating expenses, primarily due to increased salaries, wages and benefits, fuel and rent, and purchased transportation expenses, keep the bottom line under pressure. Operating expenses rose 6% in the first nine months of 2023.
Partly due to these headwinds, shares of Werner have gained 4% so far this year compared with 29.7% growth of the industry it belongs to.
Despite such headwinds, WERN’s consistent efforts to reward its shareholders via dividends and share buybacks are encouraging. In May 2023, the company’s board approved a 7.7% hike in quarterly cash dividend to 14 cents per share (annually 56 cents). WERN is also active on the buyback front. As of Sep 30, 2023, WERN had 2.3 million shares available under its share repurchase authorization.
Image Source: Zacks Investment Research
Zacks Rank and Stocks to Consider
Currently, Werner carries a Zacks Rank #5 (Strong Sell).
Wabtec has an expected earnings growth rate of 22.02% for the current year. WAB delivered a trailing four-quarter earnings surprise of 7.11%, on average.
The Zacks Consensus Estimate for WAB’s current-year earnings has improved 5.1% over the past 90 days. Shares of WAB have gained 21.8% year to date.
SkyWest's fleet-modernization efforts are commendable. The Zacks Consensus Estimate for SKYW’s current-year earnings has improved 31.5% over the past 90 days. Shares of SKYW have surged 202.1% year to date.
SKYW delivered a trailing four-quarter earnings surprise of 32.57%, on average.
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Here's Why Investors Should Give Werner (WERN) a Miss Now
Werner Enterprises, Inc. (WERN - Free Report) is mired in multiple headwinds, which, we believe, have made it an unimpressive investment option.
Werner is suffering from weak freight demand. Due to the weakness, WERN reported lower-than-expected earnings per share in each of the first three quarters of 2023. As a result, management lowered its 2023 guidance for growth in the Truckload Transportation Services or TTS segment. It anticipates TTS truck growth between (3%) and (5%) (prior view: (2%) to (4%)).
Moreover, high operating expenses, primarily due to increased salaries, wages and benefits, fuel and rent, and purchased transportation expenses, keep the bottom line under pressure. Operating expenses rose 6% in the first nine months of 2023.
Partly due to these headwinds, shares of Werner have gained 4% so far this year compared with 29.7% growth of the industry it belongs to.
Despite such headwinds, WERN’s consistent efforts to reward its shareholders via dividends and share buybacks are encouraging. In May 2023, the company’s board approved a 7.7% hike in quarterly cash dividend to 14 cents per share (annually 56 cents). WERN is also active on the buyback front. As of Sep 30, 2023, WERN had 2.3 million shares available under its share repurchase authorization.
Image Source: Zacks Investment Research
Zacks Rank and Stocks to Consider
Currently, Werner carries a Zacks Rank #5 (Strong Sell).
Some better-ranked stocks from the Zacks Transportation sector are Westinghouse Air Brake Technologies Corporation, operating as Wabtec Corporation (WAB - Free Report) and SkyWest, Inc. (SKYW - Free Report) . Each stock presently carries a Zacks Rank of 2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Wabtec has an expected earnings growth rate of 22.02% for the current year. WAB delivered a trailing four-quarter earnings surprise of 7.11%, on average.
The Zacks Consensus Estimate for WAB’s current-year earnings has improved 5.1% over the past 90 days. Shares of WAB have gained 21.8% year to date.
SkyWest's fleet-modernization efforts are commendable. The Zacks Consensus Estimate for SKYW’s current-year earnings has improved 31.5% over the past 90 days. Shares of SKYW have surged 202.1% year to date.
SKYW delivered a trailing four-quarter earnings surprise of 32.57%, on average.