NEW YORK (AP) -- Old Dominion Freight Line Inc.'s stock climbed Tuesday as a JPMorgan analyst lifted the trucking company's rating and price target, citing its appealing stock price and a competitive environment that supports market share gains.
THE SPARK: Thomas Wadewitz of JPMorgan raised Old Dominion Freight Line to "Overweight" from "Neutral" and boosted its price target to $43 from $38.
THE ANALYSIS: Wadewitz said in a note to clients that Old Dominion Freight Line's shares are only up 5.3 percent for the year-to-date, compared with an 11.5 percent rise, on average, for the rest of the transportation companies he covers. The analyst said he believes Old Dominion Freight Line's recent underperformance offers a buying opportunity, given its strong earnings per share growth track record and favorable earnings per share outlook.
Among its rivals, Wadewitz said that YRC Worldwide Inc. is negotiating with the Teamsters to close some terminals and Arkansas Best Corp. may lower capacity 15 percent to 20 percent without significant union concessions. Meanwhile Old Dominion Freight Line's biggest non-union competitors — Con-way Inc. and FedEx Freight — seems focused mostly on improving margins and not on market share, he added.
"We believe the current environment is conducive for strong tonnage and solid pricing for Old Dominion Freight Line which are key drivers of its earnings per share growth," he wrote.
A representative for the company did not immediately respond to an email seeking comment.
SHARE ACTION: Shares of Old Dominion Freight Line rose $1.31, or 3.9 percent, to $37.41 in midday trading. Over the past year, the stock has traded between $26.12 and $38.76.