reports
- Keith Schoonmaker
UPS Delivers Record Quarterly Operating Income Amid Sharp Domestic Vol...
UPS grew its second-quarter top line 3.4% and improved normalized operating profit 6.3%, in part by deftly handling a steep 30% bump in next day air express package volume. Indeed, UPS just produced the greatest reported operating income of any quarter we see in our model, which runs back to 2003. Management affirmed its prior 2019 normalized EPS guidance of $7.45--$7.75, and we maintain our fair value estimate and wide moat rating on UPS. However, we note that domestic margins fared better than...
- Keith Schoonmaker
Morningstar | CN's Growth Defies Sluggish Freight Market, Operating Ra...
We have increased our fair value estimate for Canadian National Railway by about 7% as we incorporate stronger volume projections for this year and next, and as our model adds the time value of money since our prior update. We maintain our wide moat rating. The shares trade around our fair value estimate. CN attained record quarterly revenue, EBIT, and earnings per share and cranked out a strong 57.5% operating ratio. Most of the 9% revenue increase was due to an acquisition (CAD 100 million f...
- Keith Schoonmaker
Morningstar | CN's Growth Defies Sluggish Freight Market, Operating Ra...
We have increased our fair value estimate for Canadian National Railway by about 7% as we incorporate stronger volume projections for this year and next, and as our model adds the time value of money since our prior update. We maintain our wide moat rating. The shares trade around our fair value estimate. CN attained record quarterly revenue, EBIT, and earnings per share and cranked out a strong 57.5% operating ratio. Most of the 9% revenue increase was due to an acquisition (CAD 100 million f...
- Keith Schoonmaker
CN's Growth Defies Sluggish Freight Market, Operating Ratio Snaps Back...
We have increased our fair value estimate for Canadian National Railway by about 7% as we incorporate stronger volume projections for this year and next, and as our model adds the time value of money since our prior update. We maintain our wide moat rating. The shares trade around our fair value estimate. CN attained record quarterly revenue, EBIT, and earnings per share and cranked out a strong 57.5% operating ratio. Most of the 9% revenue increase was due to an acquisition (CAD 100 million fr...
- Keith Schoonmaker
CN's Growth Defies Sluggish Freight Market, Operating Ratio Snaps Back...
We have increased our fair value estimate for Canadian National Railway by about 7% as we incorporate stronger volume projections for this year and next, and as our model adds the time value of money since our prior update. We maintain our wide moat rating. The shares trade around our fair value estimate. CN attained record quarterly revenue, EBIT, and earnings per share and cranked out a strong 57.5% operating ratio. Most of the 9% revenue increase was due to an acquisition (CAD 100 million fr...
- Keith Schoonmaker
Morningstar | CN Delivers 2% Revenue Ton Mile Growth in a Weak Freight...
Canadian National has long been the highest-margin railroad, and we don't anticipate it will deviate from its excellent mid-50s operating ratios even as other railroads improve profitability. As recently as the third quarter of 2016, CN set a quarterly record OR of 53.3% (admittedly with a strong fuel benefit). Railroads generate tremendous cash, and CN shines here, generating free cash flow averaging 15% of sales during the past decade and 12% of sales even during a trying 2009. The firm is hig...
- Keith Schoonmaker
Morningstar | CN Delivers 2% Revenue Ton Mile Growth in a Weak Freight...
Canadian National has long been the highest-margin railroad, and we don't anticipate it will deviate from its excellent mid-50s operating ratios even as other railroads improve profitability. As recently as the third quarter of 2016, CN set a quarterly record OR of 53.3% (admittedly with a strong fuel benefit). Railroads generate tremendous cash, and CN shines here, generating free cash flow averaging 15% of sales during the past decade and 12% of sales even during a trying 2009. The firm is hig...
- Keith Schoonmaker
CN Delivers 2% Revenue Ton Mile Growth in a Weak Freight Market; Back ...
Overall, carloads were lower than we modeled for the full year, pricing was much greater than we expected, the normalized operating ratio improved modestly, and we still project full-year OR betterment of about 1 percentage point, to 60.5%. We expect to increase our fair value estimate by 3% or so as we update our full-year expectations. Our wide economic moat rating remains in place, and bolstering this, CN continues to invest in capacity, with plans to double-track about 80 additional miles an...
- Keith Schoonmaker
CN Delivers 2% Revenue Ton Mile Growth in a Weak Freight Market; Back ...
Overall, carloads were lower than we modeled for the full year, pricing was much greater than we expected, the normalized operating ratio improved modestly, and we still project full-year OR betterment of about 1 percentage point, to 60.5%. We expect to increase our fair value estimate by 3% or so as we update our full-year expectations. Our wide economic moat rating remains in place, and bolstering this, CN continues to invest in capacity, with plans to double-track about 80 additional miles an...
- Keith Schoonmaker
Morningstar | Shares Still Cheap After We Reduced FedEx's FVE Due to P...
Express pioneer FedEx continues to refine its portfolio to increase margins and capture a greater share of global trade. Well known for overnight parcel deliveries, FedEx has improved its competitive advantage by building the capacity to handle additional modes of shipping. After purchasing assets in ground delivery and less-than-truckload freight (both domestic U.S. operations) and expanding its asset-light air and ocean forwarding network, FedEx can now handle most shipping modes. Fulfilling m...
- Keith Schoonmaker
Shares Still Cheap After We Reduced FedEx's FVE Due to Pension Underfu...
FedEx beat fiscal fourth-quarter adjusted EPS expectations slightly, but management’s guidance of a mid-single-digit decline in near-year’s EPS will stick in the investor’s mind and do beleaguered shares no favor in the short term. With no evidence of improved global trade or progress on FedEx operational improvements, we expect the stock to remain pressured. FedEx shares have declined 40% from a $259 52-week high on multiple concerns (trade, the threat from Amazon and the China conflict) ...
- Keith Schoonmaker
Morningstar | Robert Half and Manpower Will Benefit From Tight Labor M...
After reviewing our revenue and margin assumptions for Robert Half and Manpower, we are maintaining our narrow-moat and stable moat trend rating for Robert Half as well as our no-moat and stable moat trend rating for Manpower. However, we are lowering our fair value estimate for Robert Half to $56 from $71 and for Manpower to $87 from $103. Currently, both staffers look fairly valued following our updated valuations, and of the two, we prefer Robert Half because of the pricing power it commands ...
- Keith Schoonmaker
Robert Half and Manpower Will Benefit From Tight Labor Markets, but Sh...
After reviewing our revenue and margin assumptions for Robert Half and Manpower, we are maintaining our narrow-moat and stable moat trend rating for Robert Half as well as our no-moat and stable moat trend rating for Manpower. However, we are lowering our fair value estimate for Robert Half to $56 from $71 and for Manpower to $87 from $103. Currently, both staffers look fairly valued following our updated valuations, and of the two, we prefer Robert Half because of the pricing power it commands ...
- Keith Schoonmaker
Morningstar | FedEx Continues to Invest in TNT and Refleeting Express ...
Express pioneer FedEx continues to refine its portfolio to increase margins and capture a greater share of global trade. Well known for overnight parcel deliveries, FedEx has improved its competitive advantage by building the capacity to handle additional modes of shipping. After purchasing assets in ground delivery and less-than-truckload freight (both domestic U.S. operations) and expanding its asset-light air and ocean forwarding network, FedEx can now handle most shipping modes. Fulfilling m...
- Keith Schoonmaker
FedEx Continues to Invest in TNT and Refleeting Express as It Balances...
FedEx beat fiscal fourth-quarter adjusted EPS expectations slightly, but management’s guidance of a mid-single-digit decline in near-year’s EPS will stick in the investor’s mind and do beleaguered shares no favor in the short term. With no evidence of improved global trade or progress on FedEx operational improvements, we expect the stock to remain pressured. FedEx shares have declined 40% from a $259 52-week high on multiple concerns (trade, the threat from Amazon and the China conflict) ...
- Keith Schoonmaker
Morningstar | CMI Updated Forecasts and Estimates from 08 Jul 2019
For nearly the past 100 years, Cummins has designed and manufactured industry-leading engines and developed a brand known for reliability and durability. Today, Cummins consists of four primary segments: engines (35% of 2018 revenue), components (24%), distribution (26%), and power systems (15%). As of 2018, Cummins began reporting a fifth segment, electrified power systems, which accounts for less than 0.1% of sales.Over the past decade, Cummins’ engine and component segments have taken advan...
- Keith Schoonmaker
Morningstar | FedEx Guides to Decline in EPS in the Coming Fiscal Year...
FedEx beat fiscal fourth-quarter adjusted EPS expectations slightly, but management’s guidance of a mid-single-digit decline in near-year’s EPS will stick in the investor’s mind and do beleaguered shares no favor in the short term. With no evidence of improved global trade or progress on FedEx operational improvements, we expect the stock to remain pressured. FedEx shares have declined 40% from a $259 52-week high on multiple concerns (trade, the threat from Amazon and the China conflict) ...
- Keith Schoonmaker
FedEx Guides to Decline in EPS in the Coming Fiscal Year, Market Focus...
FedEx beat fiscal fourth-quarter adjusted EPS expectations slightly, but management’s guidance of a mid-single-digit decline in near-year’s EPS will stick in the investor’s mind and do beleaguered shares no favor in the short term. With no evidence of improved global trade or progress on FedEx operational improvements, we expect the stock to remain pressured. FedEx shares have declined 40% from a $259 52-week high on multiple concerns (trade, the threat from Amazon and the China conflict) ...
- Keith Schoonmaker
Morningstar | AME Updated Forecasts and Estimates from 24 Jun 2019
Narrow-moat-rated Ametek had a solid 2019 first quarter. While the stock traded down about 1% after the earnings announcement, we think recent acquisition growth in the electronic instruments group and the strong start to the year justified management’s guidance upgrade, and as result we lift our fair value estimate to $74 per share from $72. Our fair value estimate implies over an 18 times multiple to our 2019 adjusted earnings per share estimate, which currently sits at $4.07 (versus $4.08 a...
- Keith Schoonmaker
Morningstar | Union Pacific Implements Network Wide Precision Schedule...
Union Pacific continues to improve its profitability, most recently by implementing principles of precision scheduled railroading beginning in late 2018. While its operating ratio is much better than where other railroads began their PSR plans, we think this is the surest path to the best OR. Historically, success came a couple of decades after partial deregulation in 1980, as the railroad eliminated unprofitable routes and gained efficiency during industry consolidation. Rails rightsized assets...
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