Benchmark Reiterates Buy Rating on Knight Transportation (KNX)

Benchmark analyst Christopher Kuhn reiterated a Buy rating and $55.00 price target on Knight Transportation (NYSE: KNX).

The analyst commented, "KNX reported 2Q 2025 adjusted results that were slightly better than estimates with EPS of $.35 vs our $.32 estimate (FactSet $.33) with all segments aside from Intermodal in - line or above our operating income estimates. As we suggested in our pre view note KNX could potentially exceed expectations for 2Q, but we kept our EPS estimate given continued cost pressure in the LTL segment which did occur but was in - line with our estimates. While there were “unusual crosscurrents” in the quarter, KNX lever aged their cost initiatives and the nimbleness of the truckload model to overcome the lack of a normal seasonal build. Mix changes in the Truckload segment put more pressure on revenue per mile than anticipated but the segment had improved operating income and margins that were better than our estimates. Once again with the tariff and macro environment uncertainty projecting demand is “more challenging than usual.” The company said it is too early to have a good read on what customers are going to do around inventories and supply chains but 3Q guidance of $.36 to $.42 is in-line with our $.39 estimate (FactSet $.39 as well). The guidance for the third quarter assumes current conditions remain “fairly stable” and there is some seasonality. In fact, the beginning of July experienced normal seasonal weakness, but recently they are seeing a bit more strength than anticipated at this time in the quarter and some tightening of capacity. Like after 1Q the company is not surprisingly providing third quarter guidance as they typically would have. While the earnings beat is not a surprise; we were pleased with the core operating beat especially since the gain on sale in 2Q was less than expected. We will follow up with more details after our call with management."

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Shares of Knight Transportation closed at $45.66 yesterday.

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