What Happened?
Shares of freight carrier Old Dominion (NASDAQ: ODFL) jumped 4.3% in the morning session after investors focused on improved pricing power despite a drop in shipping volumes reported in the company's November operational update.
The company reported that its revenue per day decreased by 4.4% compared to the same month in the previous year. This drop resulted from a 10.0% decrease in less-than-truckload (LTL) tons per day. However, the decline was partly offset by an increase in LTL revenue per hundredweight, a key measure of pricing. The stock's positive reaction suggested that investors weighed the stronger pricing more heavily than the fall in shipping volume. Separately, an analyst at B of A Securities maintained a Neutral rating on the stock while raising the price target.
After the initial pop the shares cooled down to $147.62, up 4.4% from previous close.
Is now the time to buy Old Dominion Freight Line? Access our full analysis report here.
What Is The Market Telling Us
Old Dominion Freight Line’s shares are somewhat volatile and have had 11 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 2 days ago when the stock gained 5.7% on the news that BMO Capital upgraded the stock's rating to "Outperform" from "Market Perform". The analyst, Fadi Chamoun, pointed to the company's strong market position and its ability to maintain high service levels and pricing power, even during a broader slowdown in the freight industry. Despite the upgrade, the firm slightly lowered its price target to $170 from $172. The positive outlook was also based on the idea that carriers handling smaller shipments often recover first from economic slumps. Old Dominion's exposure to industrial freight was also viewed as a favorable factor for future growth as the economy improves.
Old Dominion Freight Line is down 16% since the beginning of the year, and at $147.62 per share, it is trading 32.5% below its 52-week high of $218.59 from December 2024. Investors who bought $1,000 worth of Old Dominion Freight Line’s shares 5 years ago would now be looking at an investment worth $1,426.
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