Bear Stearns downgrades freight-logistics company Landstar System (LSTR ) to peer perform from outperform.
Analyst Edward Wolfe says he is seeing increased signs of weakening long-haul and spot truckload markets. He says Landstar is likely to see a modest multiple contraction and no longer feels confident in his target for forward p-e of 24 times at this point of cycle.
While there is potential for earnings per share upside, he expects reported gross revenue growth to continue to decelerate into decelerated BCO demand environment and considerably tougher comps.
However, Wolfe expects Landstar to be one of few transport names able to retain positive earnings per share, CF into next economic downturn when it arrives.