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Here's Why Investors Should Buy Knight-Swift (KNX) Stock Now

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·3-min read
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Knight-Swift Transportation Holdings Inc. KNX performed well in the past six months period and has the potential to sustain the momentum. If you haven’t taken advantage of its share price appreciation yet, it’s time you add the stock to your portfolio.

Let’s take a look at the factors that make the stock an attractive pick.

An Outperformance: A glimpse at the company’s price trend reveals that its shares have increased 14.6% in the past six months compared with a 12.7% rise of the industry it belongs to.

Zacks Investment Research
Zacks Investment Research


Image Source: Zacks Investment Research

Solid Rank: Knight-Swift currently carries a Zacks Rank #2 (Buy). Our research shows that stocks with a Zacks Rank #1 (Strong Buy) or #2 offer attractive investment opportunities. You can see the complete list of today’s Zacks #1 Rank stocks here.

Northward Estimate Revisions: Eight estimates for 2021 moved north in the past 60 days versus no southward revision, reflecting analysts’ confidence in the company. The Zacks Consensus Estimate for 2021 earnings has moved up 7.3% in the past 60 days.

Positive Earnings Surprise History: Knight-Swift has an impressive earnings surprise history. The company outpaced the Zacks Consensus Estimate in all of the trailing four quarters, delivering an earnings surprise of 15%, on average.

Driving Factors: Knight-Swift’s improvement in adjusted operating ratio is very encouraging. Adjusted operating ratio improved to 83.8% in the first half of 2021 compared with 88.1% reported in the first half of 2020. In second-quarter 2021, the metric improved to 83.1% from 87.6% a year ago. The uptick was primarily driven by increase in revenues in the Trucking, Logistics and Intermodal segments. Lower the value of the metric, the better.

We are encouraged by management's decision to increase the current-year earnings per share (EPS) guidance. It now expects EPS in the band of $3.90-$4.05 (previous expectation: $3.45-$3.60) for 2021. The midpoint of the guidance ($3.97) is higher than the Zacks Consensus Estimate ($3.95 per share). Knight-Swift raised the guidance as it expects the strong freight conditions to continue in the current year driven by inventory restocking and upbeat demand. Strong revenue growth in the logistics and intermodal segment is expected to be maintained in 2021.

Other Stocks to Consider

Some other top-ranked stocks worth considering in the broader Zacks Transportation sector are Schneider National, Inc. SNDR, Landstar System, Inc. LSTR and Herc Holdings Inc. HRI. Schneider National and Landstar carry a Zacks Rank #2 (Buy), while Herc Holdings sports a Zacks Rank #1.

Long-term expected EPS (three to five years) growth rate for Schneider National, Landstar and Herc Holdings is pegged at 17.9%, 12% and 49.2%, respectively.


Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

KnightSwift Transportation Holdings Inc. (KNX) : Free Stock Analysis Report

Landstar System, Inc. (LSTR) : Free Stock Analysis Report

Herc Holdings Inc. (HRI) : Free Stock Analysis Report

Schneider National, Inc. (SNDR) : Free Stock Analysis Report

To read this article on Zacks.com click here.

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