Bank of America Slashes Saia Price Target by 50%

Saia shares have had an incredibly challenging past week, dropping 33% after missing earnings, down $117 from its high at $354.15, now trading at $237.95.

The Friday decline of 30+% was its worst trading session in the history of the company.

Buying opportunity? I don't think so.

Bank of America slashed its price target by 50% to a fair market value of $251.

Revenue & Earnings: Saia reported Q1 2025 revenue of $787.6 million (up ~4.3% year-over-year)​, missing analysts’ consensus of roughly $810 million​. Net income was $49.8 million, with diluted EPS of $1.86 – well below the $2.77 EPS expected by Wall Street and down sharply from $3.38 in the prior-year quarter

Profitability: Operating income dropped ~40% year-over-year to $70.2 million, and the operating ratio deteriorated to 91.1% (versus 84.4% in Q1 2024) due to higher costs​. This marked Saia’s weakest operating margin since early 2020 and fell short of management’s guidance (which had implied an OR around 87.5%)​.

Ken Hoexter of Bank of America said:

“The Less-than-Truckload (LTL) carrier posted 1Q results well below our/ Street’s targets, given a lack of seasonal rebound in March from Feb. (which continued into April), mix pressure (regional carriers gaining share), and cost pressures, as SAIA rapidly expanded its network into a stalled macro backdrop."

Hoexter added:

"Recent macroeconomic and yield pressure suggests increased price competitiveness in the industry, which likely sustains itself in an industry with 30% excess capacity and a desire to keep networks busy."

I previously highlighted some freight stocks in a prior article. I believe the struggle will continue into the year. With tariff uncertainty, it's unlikely we'll see an increase in demand anytime soon.

I am not a financial advisor, but my advice is to stay away from freight stocks for now.