TD Cowen analyst Jason Seidl reiterated a Buy rating on Covenant Logistics Group today and set a price target of $27.00.
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Jason Seidl has given his Buy rating due to a combination of factors influencing Covenant Logistics Group’s performance and future outlook. Despite a slight miss in Q3 earnings, Seidl notes that the company is optimistic about regulatory actions that could lead to capacity exits, which aligns with his analysis. This potential reduction in capacity could benefit CVLG in the long term, as it may lead to healthier rate increases with select customers who are concerned about tightening capacity.
Additionally, while there were some short-term challenges, such as the impact of the government shutdown on a profitable segment and volatility in spot rates affecting margins, Seidl maintains a positive outlook. He acknowledges that the management’s strategic focus on specialized growth and the potential for a tighter rate environment in the future could enhance the company’s performance. These factors, combined with the company’s ability to secure rate increases from certain customers, support Seidl’s decision to reiterate a Buy rating with a price target of $27.