Schneider National, Inc.

SNDR Details

Schneider National, Inc. (NYSE: SNDR) is a top transportation and logistics service provider in North America. It provides a broad range of truckload, intermodal, and logistics services and has an operating history of 80 years. The company operates in three segments, viz. 1) Truckload, which provides freight services by company employed drivers through either one-way shipments (Network) and dedicated long-term contracts, 2) Intermodal, consisting of door-to-door container on flat car (COFC) services through a combination of rail and dry transportation, and 3) Logistics, providing freight brokerage services to third party operators.

Zero Full Load Thefts in FY20: On May 19, 2021, SNDR announced that it had achieved zero thefts for cargo in FY20. SNDR moves more than nine million miles of freight every day across North America, considering this reaching zero thefts in FY20 is a major milestone achieved. The transportation provider formerly achieved zero theft load year in FY14.

Innovation in Freight Technology: On March 08, 2021, the transportation provider announced the expansion of the technology lineup of Schneider FreightPower, a digital platform, to help shippers save time and increase their capacity, backed by Schneider’s trusted services. With the help of Schneider FreightPower, the shippers can easily book, track and confirm delivery 24/7.

Diverse End Markets and Customer Base (Source: Investor Presentation, Q1FY21)

Q1FY21 Results: The company reported a 9.78% surge in operating revenue to USD 1,228.60 million in Q1FY21 (ended March 31, 2021) compared to USD 1,119.10 million in Q1FY20. SNDR reported an increase in net income to USD 54.80 million in Q1FY21 vs USD 43.80 million in Q1FY20. As of March 31, 2021, the company stood at the cash and cash equivalents of USD 472.20 million with a total debt of USD 307.90. Total Truckload’s revenue per tractor per week (excluding fuel surcharge) improved by 4.13% to USD 3,706 in Q1FY21 from USD 3,559 in Q1FY20.

Key Risks: SNDR’s Class A common stock has ten votes per share, while Class B common stock has one vote per share. These concentrates voting control with certain members of the Schneider family members who hold 94% of the total voting power (100% of Class A common stock and 42% of Class B common stock). This concentration of voting power limits the ability of other shareholders to influence corporate matters.

Outlook: In FY21, the company expects to spend USD 375 to 425 million in capital expenditures subject to potential Original equipment manufacturer (OEM) supply chain issues. SNDR projects its FY21 adjusted diluted earnings per share to be around USD 1.60 to USD 1.70.

Valuation Methodology: EV/EBITDA Multiple Based Relative Valuation

(Analysis by Kalkine Group)

SNDR Daily Technical Chart

Stock Recommendation: SNDR stock fell 12.65% in the past three months and is currently trading close to the lower-band of the 52-week range of USD 19.96 to USD 27.15. The stock is currently trading below its 50 and 200 DMA levels, and its RSI Index is 34.58. We have valued the stock using the EV/EBITDA-based relative valuation methodology and arrived at a target price of USD 26.62. Considering the company's market dominance in North America, innovation in technology infrastructure, 100% theft-free loads, and increasing free cash flows, we recommend a "Buy" rating on the stock at the current price of USD 21.81, down 0.36% as of June 30, 2021, at 3:13 PM ET.

*All forecasted figures and Industry Information have been taken from REFINITIV.

*The reference data in this report has been partly sourced from REFINITIV.

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