Saia Navigates Trucking Turbulence With Clear 2026 Upside, Analyst Says

Core Viewpoint - Saia, Inc. experienced a decline in stock price as investors assessed mixed fourth-quarter freight trends against the company's long-term national expansion strategy [1] Group 1: Fourth-Quarter Performance - In October, Saia reported a year-over-year decline in LTL shipments and tonnage per workday, although weight per shipment slightly increased [1] - November saw an increase in shipments and tonnage per workday, but weight per shipment decreased compared to the previous year [1] - Analyst Ken Hoexter noted that October's weakness offset November's strength, with expectations for a softer December [2] Group 2: Market Dynamics - Saia's largest revenue market, Los Angeles, experienced a nearly 20% year-over-year decline in volumes, contributing to unfavorable mix headwinds [3] - Growth was primarily driven by shorter, lower-revenue lanes as Saia expands nationally, contrasting with its historical focus on longer-haul routes [3] Group 3: Contract and Freight Conditions - Customers are discussing 2026 contract levels with increased certainty due to stabilizing tax policy, interest rates, and tariff expectations [4] - Despite tightening truckload capacity conditions, there has been no significant shift of freight from truckload to LTL, attributed to regulatory enforcement and rising carrier bankruptcies [4] Group 4: Financial Outlook - Saia maintained its fourth-quarter operating ratio target, anticipating a larger seasonal deterioration than historical averages [5] - The operating ratio forecast remains unchanged, with Saia outperforming peers in tons-per-day growth during network expansion [5] - The analyst raised the price forecast for Saia from $322 to $367, reflecting a higher earnings multiple for 2026 [5][6] Group 5: Valuation and Earnings Expectations - The current valuation is slightly above Saia's five-year range, accounting for its transition into a national carrier supported by improving yields and network integration [6] - Earnings expectations for fourth-quarter 2025 EPS remain at $1.88 and 2026 EPS at $11.10 [6]