Old Dominion Freight Line Faces Sluggish Industrial Demand, Analyst Downgrades Stock

Old Dominion Freight Line, Inc. (NASDAQ:ODFL) shares are trading slightly lower on Friday. BMO Capital Markets analyst Fadi Chamoun downgraded the company to Market Perform from Outperform and lowered the price target to $210 from $214.

The analyst writes that consensus/BMOe F2025 earnings expectations have decreased by 13%/15%. Demand remains muted, and the timeline for a recovery in freight markets continues to be delayed.

The downgrade reflects anticipation of further negative revisions as the recovery timeline for freight markets extends.

Chamoun says that industrial demand, which represents two-thirds of LTL traffic, remains sluggish.

The analyst writes that although loosening monetary policy is expected to boost volume eventually, the delay between lower rates and a resurgence in demand extends the potential recovery timeline into H2 2025 or beyond.

With multiples at record highs, the near-term margin of safety is limited, adds the analyst.

The analyst reduced the below-consensus forecast for FY25 by 2.5% to $6.00 (versus consensus at $6.27) and for FY26 by 3.3% to $7.06 (compared to consensus of $7.15).

Investors can gain exposure to the stock via First Trust S&P 500 Diversified Dividend Aristocrats ETF (BATS:IYT) and ProShares Trust ProShares Supply Chain Logistics ETF (NYSE:SUPL).

Price Action: ODFL shares are down 0.82% at $199.86 at the last check Friday.

Photo via Shutterstock

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