Benchmark Reiterates Hold Rating on Forward Air (FWRD)

Benchmark analyst Chris Kuhn reiterated a Hold rating and {REMOVEPT} price target on Forward Air (NASDAQ: FWRD).

The analyst commented, "Forward Air continues to focus on transitioning from the integration of Omni to the transformation of the combined company. FWRD has been tracking ahead of plan on the annualized cost savings initiatives and reached $80m, which will be the run-rate in 1Q 2025 and beyond. They have executed more than $100m of annualized cost synergies in the first year following the Omni transaction. At the same time, given continued weak results from the core Expedited LTL business, 4Q adjusted EBITDA was below our expectations. Omni adjusted EBITDA results continue to improve sequentially ex integration costs from $27m to $32m but the Expedited LTL segment missed our expectations again due to business mix. Given the amended credit facility agreement the leverage ratio of 5.5x TTM adjusted EBITDA was comfortably below its first lien net leverage ratio. Despite the EBITDA miss in 4Q, FY 2024 adjusted EBITDA of $308m was at the high end of the $300m-$310m guidance range given increased EBITDA adjustments for the last three quarters due to continued cost structure actions in accordance with the credit agreement. Given the FY EBITDA, there is now a $59m cushion per the recently amended credit agreement. Cash provided by operating activities declined $31m in 4Q after a $53m increase in 3Q. Still, in the second half net cash provided by operating activities was $20m compared to a $97m use in the first half. As transaction and other costs reduce and core operations increase, the cash flow profile should improve in 2025. FWRD ended the quarter with total cash of $105m. Adding the cash to the $277m of availability under the amended reduced revolving credit facility, liquidity at the end of the quarter was $382m down from $460m last quarter."

For an analyst ratings summary and ratings history on Forward Air click here. For more ratings news on Forward Air click here.

Shares of Forward Air closed at $25.75 yesterday.

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