Updated Aug 6 at 2:11pm ET.
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Chief Executive Officer Preston Feight sold about 6.8 million dollars of stock on July 31. This sale happened alongside an exercise of options, which are contracts that allow an executive to buy shares at a set price, valued at roughly 5.1 million dollars. While the dollar amount is large, these types of transactions are often part of a planned schedule for executives to manage their personal finances. Because it was tied to an option exercise rather than a simple exit from the stock, it does not suggest a change in his outlook for the truck maker.
Bernstein set a new price target of 148 dollars for the stock. This is about 12 percent higher than where the stock is currently trading and sits at the top end of our own estimated fair value range.
This call reflects confidence in the company's ability to keep growing its truck deliveries and high-margin parts business. For a long-term owner, it serves as a data point that analysts are beginning to value the company's steady cash flow more highly as freight demand recovers.
Source: Bernstein
The company earned 1.43 dollars per share last quarter, which was better than the 1.36 dollars analysts expected. While total revenue of 7.55 billion dollars was slightly lower than predicted, net income grew 24 percent compared to the previous three months.
Management noted that they are building trucks faster because freight companies are placing more orders. This is a key sign that the industry is moving past a period of slow demand. For those looking at the long term, the fact that the company can grow profits even when revenue is slightly soft shows the strength of its high-margin parts and service business.
See the full quarter, and how our tracked metrics did
Source: 8-K filing
Analysts have kept their ratings steady following the company's recent quarterly earnings report. Only 14 of 45 analysts recommend buying the stock, and the average price target of $132 is essentially equal to the current share price.
The company has a habit of clearing the bars set by analysts, beating profit expectations in five of the last eight quarters as truck demand stayed resilient.
| Expectation | |
|---|---|
| EPS | $1.60 |
| Revenue | $7.51B |
