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Daseke To Buy Back 3M In Stock; Street Sees Over 24% Upside

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support@smarteranalyst.com (Ben Mahaney)
·2 min read
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Daseke, the largest flatbed, specialized transportation, and logistics solutions company in North America, announced its stock repurchase program of up to 3 million shares of its outstanding common stock.

Recently, Daseke (DSKE) refinanced its existing $484 million Term Loan B due Feb. 2024 with a new $400 million Term Loan B and cash in hand. The new Term Loan B will mature in March 2028 and has a reduced floating interest rate of LIBOR + 400 basis points, with the LIBOR floor also falling 25 basis points to 75 basis points.

Daseke’s CFO Jason Bates commented, “With the recent refinancing transaction now complete, the Company is in a strong position to utilize excess cash to opportunistically repurchase public shares. We will maintain a disciplined and balanced approach to capital allocation over the long-term, with a keen focus on value creation as we continue to balance our decisions between investing for growth, leverage reduction and balance sheet optimization, and/or through opportunistic share repurchases.”

In January, the company reported 4Q results. Adjusted earnings doubled on a year-over-year basis to $0.12 per share and compared favorably with the $0.04 loss per share, estimated by analysts. Adjusted revenues decreased 7% to $335.6 million but exceeded analysts’ expectations of $331.58 million. As for 2021, revenue is expected to land between $1.4 billion and $1.5 billion. (See Daseke stock analysis on TipRanks)

On March 11, Northland Securities analyst Greg Gibas reiterated a Buy rating and a price target of $8.50 (14.3% upside potential) on the stock.

Gibas said, “We continue to appreciate DSKE’s end market diversification and noticeable operating ratio improvement in 2020 despite the difficult industrial market backdrop, which is beginning to build momentum/recover, with near-term focus on strategic integration and leverage reduction.”

The rest of the Street is cautiously optimistic about the stock with a Moderate Buy consensus rating based on 2 unanimous Buys. The average analyst price target of $9.25 implies 24.3% upside potential to current levels. Shares have increased 44.2% over the past six months.

Daseke scores an 8 of 10 on TipRanks’ Smart Score rating system, indicating that the stock has strong potential to outperform market expectations.

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