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Here's Why Investors Should Avoid Landstar (LSTR) Stock Now
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Landstar System (LSTR - Free Report) is currently mired in multiple headwinds, which, we believe, have made it an unimpressive investment option.
Let’s delve deeper.
Southward Earnings Estimate Revisions: The Zacks Consensus Estimate for fourth-quarter 2023 earnings has been revised 15% downward over the past 90 days. For 2023, the consensus mark for earnings has moved 3.3% south in the same time frame. The unfavorable estimate revisions indicate brokers’ lack of confidence in the stock.
Weak Zacks Rank and Style Score: Landstar currently carries a Zacks Rank #5 (Strong Sell). Moreover, the company’s current Momentum Style Score of C shows its short-term unattractiveness.
Unimpressive Price Performance: LSTR has lost 2.8% over the past six months compared with its industry’s 7.7% growth.
Image Source: Zacks Investment Research
Other Headwinds: Landstar is being hurt by weak freight conditions. Inflation-related woes have resulted in reduced consumer demand for goods. This, in turn, is affecting freight volumes.
Additionally, escalating operating expenses, primarily due to a rise in purchased transportation costs and fuel prices, pose a threat to the company's bottom line. Increasing expenses are putting pressure on the margins. Driver shortage continues to be a major challenge faced by the trucking industry.
Bearish Industry Rank: The industry, to which LSTR belongs, currently has a Zacks Industry Rank of 240 (of 250 plus groups). Such an unfavorable rank places it in the bottom 5% of the Zacks industries. Studies show that 50% of a stock price movement is directly related to the performance of the industry group it belongs to.
A mediocre stock within a strong group is likely to outclass a robust stock in a weak industry. Therefore, reckoning the industry’s performance becomes imperative.
Wabtec has an expected earnings growth rate of 22.43% 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 4.9% over the past 90 days. Shares of WAB have gained 27.2% year to date.
SkyWest's fleet-modernization efforts are commendable. The Zacks Consensus Estimate for SKYW’s current-year earnings has improved 38.9% over the past 90 days. Shares of SKYW have surged 217.7% 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 Avoid Landstar (LSTR) Stock Now
Landstar System (LSTR - Free Report) is currently mired in multiple headwinds, which, we believe, have made it an unimpressive investment option.
Let’s delve deeper.
Southward Earnings Estimate Revisions: The Zacks Consensus Estimate for fourth-quarter 2023 earnings has been revised 15% downward over the past 90 days. For 2023, the consensus mark for earnings has moved 3.3% south in the same time frame. The unfavorable estimate revisions indicate brokers’ lack of confidence in the stock.
Weak Zacks Rank and Style Score: Landstar currently carries a Zacks Rank #5 (Strong Sell). Moreover, the company’s current Momentum Style Score of C shows its short-term unattractiveness.
Unimpressive Price Performance: LSTR has lost 2.8% over the past six months compared with its industry’s 7.7% growth.
Image Source: Zacks Investment Research
Other Headwinds: Landstar is being hurt by weak freight conditions. Inflation-related woes have resulted in reduced consumer demand for goods. This, in turn, is affecting freight volumes.
Additionally, escalating operating expenses, primarily due to a rise in purchased transportation costs and fuel prices, pose a threat to the company's bottom line. Increasing expenses are putting pressure on the margins. Driver shortage continues to be a major challenge faced by the trucking industry.
Bearish Industry Rank: The industry, to which LSTR belongs, currently has a Zacks Industry Rank of 240 (of 250 plus groups). Such an unfavorable rank places it in the bottom 5% of the Zacks industries. Studies show that 50% of a stock price movement is directly related to the performance of the industry group it belongs to.
A mediocre stock within a strong group is likely to outclass a robust stock in a weak industry. Therefore, reckoning the industry’s performance becomes imperative.
Stocks to Consider
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 22.43% 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 4.9% over the past 90 days. Shares of WAB have gained 27.2% year to date.
SkyWest's fleet-modernization efforts are commendable. The Zacks Consensus Estimate for SKYW’s current-year earnings has improved 38.9% over the past 90 days. Shares of SKYW have surged 217.7% year to date.
SKYW delivered a trailing four-quarter earnings surprise of 32.57%, on average.