Canadian Pacific Railway Ltd. (NYSE: CP) has a median target price of $66.76 from 14 brokers. Shares are trading today at $61.24, for an implied gain of $5.52, or 9%. Canadian Pacific’s forward P/E is 13.83 and the company pays a dividend yield of 2%. The stock’s 52-week trading range is $44.74-$69.92, and at today’s price that’s about 37% above its 52-week low, posted earlier this morning, and 12% below the 52-week
high. Canadian Pacific reported earnings earlier this week and missed both EPS and revenue estimates. The company’s intermodal freight volume fell by nearly -11%, but coal volumes rose by almost 22%. The company also benefited from a 27% increase in fertilizer shipments.
Diana Shipping Inc. (NYSE: DSX) has a median target price of $12.00 from 13 brokers. Shares are trading today at $8.12, for an implied gain of $3.88, or 48%. Diana’s forward P/E is 9.82 and the company does not pay a dividend. The stock’s 52-week trading range is $6.59-$14.23, and at today’s price that’s about 23% above its 52-week low, posted earlier this morning, and 43% below the 52-week high. Diana is a dry-bulk shipper of iron ore, coal, grain, and other commodities. The entire dry-bulk industry has suffered from an oversupply of ships, and in its most recent quarterly report, the company’s operating income fell about -17% and it missed EPS estimates. EPS estimates for the September quarter have been shaved to $0.31, about -10% below the June quarter’s results.
DryShips, Inc. (NASDAQ: DRYS) has a median target price of $6.00 from 9 brokers. Shares are trading today at $2.73, for an implied gain of $3.27, or 120%. DryShips’ forward P/E is 4.37 and the company does not pay a dividend. The stock’s 52-week trading range is $1.75-$6.44, and at today’s price that’s about 56% above its 52-week low, posted earlier this morning, and 58% below the 52-week high. From an all-time high in October 2007 over $120/share, DryShips has collapsed, partly on general economic conditions and partly on bad management decisions. The company is trying to build up its offshore drilling business to replace its dry-bulk shipping, but that is such an expensive endeavor that it hardly seems likely to pull the shares out of the doldrums any time soon.
Excel Maritime Carriers Ltd. (NYSE: EXM) has a median target price of $2.75 from 8 brokers. Shares are trading today at $2.76, above its median price target. Excel’s forward P/E is negative and the company does not pay a dividend. The stock’s 52-week trading range is $1.63-$6.63, and at today’s price that’s about 69% above its 52-week low, posted earlier this morning, and 58% below the 52-week high. Excel reported earnings earlier this week and managed to miss very ugly targets. The consensus EPS estimate called for a loss of -$0.17, but Excel posted an EPS loss of -$0.25. Everything about the quarter was worse than a year ago, and the nine-month roll-up is a loser from top to bottom. That the shares are trading above their target price only means that analysts have stopped paying attention to this stock.
Frontline Ltd. (NYSE: FRO) has a median target price of $7.25 from 10 brokers. Shares are trading today at $5.73, for an implied gain of $1.52, or 27%. Frontline’s forward P/E is negative and the company pays a dividend yield of 1.6%. The stock’s 52-week trading range is $3.88-$29.15, and at today’s price that’s about 48% above its 52-week low, posted earlier this morning, and 80% below the 52-week high. Frontline may be the weakest of any shipping company. The company’s own outlook for 2012 calls for an even worse year than 2011. A slide into bankruptcy may be all that’s left here.
JB Hunt Transport Services Inc. (NASDAQ: JBHT) has a median target price of $49.00 from 26 brokers. Shares are trading today at $42.72, for an implied gain of $6.28, or 15%. Hunt’s forward P/E is 17.53 and the company pays a dividend yield of 1.2%. The stock’s 52-week trading range is $34.42-$49.12, and at today’s price that’s about 24% above its 52-week low, posted earlier this morning, and 13% below the 52-week high. JB Hunt has turned more attention to the intermodal market and that is having a good effect on revenue and profits. In the third quarter, Hunt reported intermodal volume increased 15% and revenue increased by 24%. Meanwhile, the company’s traditional trucking business rose just 2%. Hunt’s future is in the intermodal business, and the company knows it. The current price target could be easily set higher, and Hunt might just as easily drive through it too.
LandStar System Inc. (NASDAQ: LSTR) has a median target price of $51.50 from 18 brokers. Shares are trading today at $45.44, for an implied gain of $6.06, or 13%. Hunt’s forward P/E is 17.49 and the company pays a dividend yield of 0.5%. The stock’s 52-week trading range is $35.85-$49.66, and at today’s price that’s about 27% above its 52-week low, posted earlier this morning, and 8.5% below the 52-week high. Landstar reported solid earnings growth on Monday, and raised EPS guidance for the fourth quarter to $0.62-$0.67. Analysts had been predicting EPS of $0.60 for the current quarter. Landstar’s largest business is contracting with independent truckers under exclusive lease agreements. It’s intermodal volumes are quite small, but the company has been doing very well without it — and so have shareholders.
Paul Ausick
