) to strong buy from buy.
Analyst Thom Albrecht says while it might seem unusual to upgrade SCS after he recently reduced his estimates (he cut the 94 cents 2003 earnings per share estimate to 91 cents, and trimmed the $1.21 2004 estimate to $1.19), he thinks the risk/reward ratio is favorable for investors to consider.
He says the valuation is compelling as SCS trades at just 12.3 times his 2004 estimate, vs. nearly 16 times, on average, for other public less-than-truckload carriers. He notes while earnings per share have not exploded upwards yet, SCS just posted its best operating ratio ever, even adjusting for a favorable out-of-period revenue adjustment. He has a $19 12-month target.