) to equal-weight from overweight; the firm also cut its ratings on FedEx (FDX
) and United Parcel Service (UPS
) to underweight.
Analyst James Valentine says he thinks Arkansas Best's stock is reflecting most of the benefits associated with the Consolidated Freightways closure, the main catalyst for his upgrade last month. He says valuations for FedEx and UPS are largely in-line with historical levels; the analyst believes the group will perform in-line with broader based markets over the next 12-18 months. Valentine raised his EPS estimates for Arkansas Best from $1.30 to $1.39 for 2002 and from $2.90 to $2.95 for 2002 to reflect the near-term benefits from the ConFreight liquidation. He sees EPS of $2.60 for fiscal 2003 (May) and $3.15 for fiscal 2004 for FedEx; he cut his EPS estimates for UPS from $2.20 to $2.15 for 2002 and from $2.65 to $2.50 for 2003.