NEW YORK (TheStreet) -- Werner Enterprises (WERN) - Get Report stock is up 0.54% to $31.94 in early morning trading Tuesday after Deutsche Bank upgraded the company's rating to "buy" from "hold," and increased its price target to $36 from $30.
Werner Enterprises is a transportation and logistics company engaged in hauling truckload shipments of general commodities in both interstate and intrastate commerce.
"Earnings are poised to accelerate this year given better underlying demand trends from its Big Box and dollar store customer base (who should see the greatest leverage to lower gasoline prices,) a better rate environment, improved dedicated profitability and cost initiatives," Deutsche Bank noted.
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Werner reported earnings of $1.36 per share in its fiscal year 2014, versus $1.18 per share in 2013. The transportation company had also increased its sales to $2.13 billion in 2014 from $2.02 billion in 2013.
Analysts estimate that Werner will post earnings of $1.62 per share and $1.88 per share in 2015 and 2016, respectively. Deutsche Bank forecasts sales of $2.21 billion and $2.41 billion for fiscal years 2015 and 2016, respectively, as well.
Separately, TheStreet Ratings team rates WERNER ENTERPRISES INC as a Buy with a ratings score of A-. TheStreet Ratings Team has this to say about their recommendation:
"We rate WERNER ENTERPRISES INC (WERN) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its impressive record of earnings per share growth, increase in net income, revenue growth, largely solid financial position with reasonable debt levels by most measures and solid stock price performance. We feel these strengths outweigh the fact that the company shows weak operating cash flow."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- WERNER ENTERPRISES INC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past year. We feel that this trend should continue. During the past fiscal year, WERNER ENTERPRISES INC increased its bottom line by earning $1.36 versus $1.18 in the prior year. This year, the market expects an improvement in earnings ($1.60 versus $1.36).
- The company, on the basis of net income growth from the same quarter one year ago, has significantly outperformed against the S&P 500 and exceeded that of the Road & Rail industry average. The net income increased by 47.5% when compared to the same quarter one year prior, rising from $22.18 million to $32.71 million.
- Despite its growing revenue, the company underperformed as compared with the industry average of 13.9%. Since the same quarter one year prior, revenues slightly increased by 6.8%. Growth in the company's revenue appears to have helped boost the earnings per share.
- WERN's debt-to-equity ratio is very low at 0.09 and is currently below that of the industry average, implying that there has been very successful management of debt levels. To add to this, WERN has a quick ratio of 1.68, which demonstrates the ability of the company to cover short-term liquidity needs.
- Looking at where the stock is today compared to one year ago, we find that it is not only higher, but it has also clearly outperformed the rise in the S&P 500 over the same period. Although other factors naturally played a role, the company's strong earnings growth was key. The stock's price rise over the last year has driven it to a level which is somewhat expensive compared to the rest of its industry. We feel, however, that other strengths this company displays justify these higher price levels.
- You can view the full analysis from the report here: WERN Ratings Report