Saia Upgraded Ahead Of Earnings Less-Than-Truckload Freight carrier Saia (NASDAQ: SAIA) got an upgrade from Deutsche Bank a week ahead of earnings and we are not surprised. The company is well-positioned as a specialty and...

Saia Pulls Into A Buying Opportunity

Less-Than-Truckload freight carrier Saia (NASDAQ: SAIA) got an upgrade from Deutsche Bank a week ahead of earnings and we are not surprised. The company is well-positioned as a specialty and on-demand source of shipping, freight, and logistics services in a world where freight, shipping, and logistics are in record demand. Not only is the company riding the wave of demand but it is also expanding its footprint and increasing its coverage as well. In Deutsche Bank's view, the company is set up to outperform in 2022 and we couldn't agree more.

Deutsche Bank upped its rating on Saia to Buy from Hold putting the Marketbeat.com consensus of 14 analysts at weak Buy. Deutsche Bank also raised its price target to $363 which projects about 30% of the upside for the stock. This compares with the consensus price target of $337, a target that has been on the rise in the 1 year, 90 day, and 30-day periods and we see it moving higher again in the wake of the earnings report. Integrated operator J.B. Hunt reported better-than-expected earnings driven by strength in all segments. The high price target, we should note, is $400 and was set by Susquehanna when it initiated coverage a month ago.

The Analysts Are Driving Saia To New Highs

The trend in analyst sentiment couldn't be any more bullish for this stock. While the consensus is still only a weak buy the market is picking up new analysts and new coverage while its rating and price target are on the rise. The consensus rating has risen steadily from a weak Hold last year to its weak Buy status this year effectively upping its status a full notch. As for the price target, the price target is up 130% in the last year, 37% in the last 90 days, and 5.5% in the last month so this is strong momentum we are talking about.

The flip-side of this cone, the institutions, tells a different tale. While the net of institutional activity has been bullish over the past year the trend changed in Q3 2021 and sellers have been outpacing buyers ever. This coincided with a top in the stock, a top that is also an all-time high, so profit-taking and rotation is the theme but still a theme that could cap gains for the near to short-term. The upshot, however, is that institutions own almost 100% of the stock so once they stop taking cash out of the market the stock should move higher.

The Analysts Grossly Underestimte Saia's Q4 Earnings

When we saw the consensus estimate for Saia's Q4 results we knew without a doubt the company would not only beat the consensus but by at least 300 basis points and more toward the low-double-digit range than not. The current consensus is calling for a sequential decline in revenue that is not supported by the demand picture or the pricing environment not to mention the company's efforts to expand operations. In our view, the Q4 revenue could be as much as 15% above the consensus and we would expect to see some earnings strength as well.

The Technical Outlook: Saia, The Bottom May Be At Hand

The pullback in Saia may be over but it is still too early to tell. While we expect to see strength in the report it's not a guarantee and, even so, it may not be enough to get the market moving. The current setup looks a little bearish, in fact, and may lead the stock down to the $240 level or lower before the uptrend is resumed.