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Bear Stearns upgraded LandStar System (LSTR
) to outperform from peer perform.
Analyst Edward Wolfe says LandStar is down 13% from a 52-week high on Jan. 12, despite upside in the fourth-quarter earnings per share report, after which continuing earnings per share estimates increased. Wolfe says, in a conference call, LandStar reported a multiple-fatality accident, marking the third accident above $5 million in the past decade. He believes this a non-ongoing event, though the company will likely increase its deductible going forward.
Wolfe thinks LandStar is well positioned for a tight driver capacity environment as the economy improves. He thinks the timing is right for non-asset-based names. Wolfe set a $42 target, and sees $2.10 2005 earnings per share.