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Here's Why Investors Should Avoid Landstar (LSTR) Currently
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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 current-quarter earnings has been revised 16.6% downward over the past 60 days. For the current year, the consensus mark for earnings has moved 11.5% 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 #4 (Sell). Moreover, the company’s current Value Style Score of C shows its unattractiveness.
Unimpressive Price Performance: LSTR has lost 2.4% over the past six months against its industry’s 11% 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 239 (of 250 plus groups). Such an unfavorable rank places it in the bottom 4% 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.
SkyWest is based in St. George, UT. Its fleet modernization efforts are commendable. By 2026-end, SkyWest is likely to operate a total of 258 E175 aircraft. We are impressed by SKYW's efforts to reward its shareholders through buybacks. Upbeat passenger volumes also bode well.
Over the past 60 days, the Zacks Consensus Estimate for 2024 earnings has been revised upward by 3.6%. SkyWest shares have gained 37.7% over the past three months. SKYW currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
American Airlines is witnessing improvements driven by an encouraging air-travel-demand scenario, particularly on the domestic front. The carrier's debt-reduction efforts are impressive as well. Management aims to reduce its debt by $15 billion by 2025-end.
The Zacks Consensus Estimate for 2024 earnings has been revised 4.19% upward over the past 60 days. AAL surpassed the Zacks Consensus Estimate for earnings in each of the past four quarters, the average beat being 23.83%. AAL currently carries a Zacks Rank #2 (Buy).
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Here's Why Investors Should Avoid Landstar (LSTR) Currently
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 current-quarter earnings has been revised 16.6% downward over the past 60 days. For the current year, the consensus mark for earnings has moved 11.5% 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 #4 (Sell). Moreover, the company’s current Value Style Score of C shows its unattractiveness.
Unimpressive Price Performance: LSTR has lost 2.4% over the past six months against its industry’s 11% 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 239 (of 250 plus groups). Such an unfavorable rank places it in the bottom 4% 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
Investors interested in the broader Transportation sector may consider some better-ranked stocks like SkyWest (SKYW - Free Report) and American Airlines (AAL - Free Report) .
SkyWest is based in St. George, UT. Its fleet modernization efforts are commendable. By 2026-end, SkyWest is likely to operate a total of 258 E175 aircraft. We are impressed by SKYW's efforts to reward its shareholders through buybacks. Upbeat passenger volumes also bode well.
Over the past 60 days, the Zacks Consensus Estimate for 2024 earnings has been revised upward by 3.6%. SkyWest shares have gained 37.7% over the past three months. SKYW currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
American Airlines is witnessing improvements driven by an encouraging air-travel-demand scenario, particularly on the domestic front. The carrier's debt-reduction efforts are impressive as well. Management aims to reduce its debt by $15 billion by 2025-end.
The Zacks Consensus Estimate for 2024 earnings has been revised 4.19% upward over the past 60 days. AAL surpassed the Zacks Consensus Estimate for earnings in each of the past four quarters, the average beat being 23.83%. AAL currently carries a Zacks Rank #2 (Buy).