National Bank hosted TFI International (TFII.TO) chief executive Alain Bedard to a fireside chat
After years of challenging end markets, the trucking sector has more recently been boosted by regulatory actions in the U.S. and Canada that is effectively leading to capacity exiting the market, notes analyst Cameron Doerksen.
The lower capacity has also enabled TFI International to raise its contract rates with customers, but demand is still relatively soft, Bedard notes. He doesn't expect the situation to improve materially until next year.
Improving the profitability in the company's U.S. LTL operations is a clear priority for management. Although TFII is showing some improvement on that front, there is still work to do operationally, but the company is beginning to show some organic growth in that segment, Doerksen notes.
The company also expects to lay low on the M&A front in the near-term as sellers' expectations have increased significantly given the more positive outlook on the industry broadly. However, absent any large acquisitions, debt reduction will remain the capital allocation priority this year.
National Bank has an outperform rating and $208.00 price target on TFI International shares,
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