UBS Downgrades Knight-Swift to Neutral from Buy, Raises PT to $51.

UBS Downgrades Knight-Swift to Neutral from Buy, Raises PT to $51.

UBS Group AG has downgraded Knight-Swift Transportation Holdings Inc. (NYSE: KNX) from a Buy rating to Neutral, while simultaneously raising its price target from $46.00 to $51.00. The stock currently trades at $44.11, with analyst targets ranging from $43 to $68, reflecting a mixed market sentiment [2].

The downgrade comes as UBS analyst Thomas Wadewitz cited limited upside potential for Knight-Swift stock over the next year. UBS projects only modest growth in freight activity of 1% to 2% for 2026, along with limited truckload market contract rate increases of around 2%, constraining Knight’s earnings potential [2].

The firm acknowledged that Knight-Swift stock remains sensitive to fluctuations in truckload spot rates and potential interest rate cuts by the Federal Reserve. UBS emphasized that stronger contract rate increases combined with well-controlled cost inflation would be necessary to drive a meaningful recovery in Knight’s truckload operating ratio, which is considered the most important factor for the company’s earnings performance [2].

Despite the downgrade, recent earnings reports have been positive. Knight-Swift reported its second-quarter 2025 adjusted earnings per share at $0.35, surpassing both Stifel’s estimate of $0.32 and the consensus forecast of $0.33. The company’s core Truckload segment exceeded expectations, aided by cost containment and utilization initiatives [2].

Knight-Swift also declared a quarterly cash dividend of $0.18 per share, payable on September 22, 2025. The company announced its support for the proposed merger between Union Pacific Railroad and Norfolk Southern Corporation, which would create a coast-to-coast railroad [2].

The recent developments, including the proposed merger and Secretary of State Marco Rubio's announcement halting the issuance of worker visas for commercial truck drivers, highlight significant movements and decisions impacting Knight-Swift and the broader transportation sector [2].

Investors should closely monitor these developments and UBS's analysis as they may influence Knight-Swift's stock performance in the coming quarters.

References:
[1] https://www.theglobeandmail.com/investing/markets/stocks/HSBC/pressreleases/34548343/heres-what-makes-ubs-stock-a-solid-investment-option-now/
[2] https://www.investing.com/news/analyst-ratings/ubs-downgrades-knight-transportation-stock-rating-to-neutral-on-limited-upside-93CH-4226178