Citigroup Reaffirms Sell Rating on Werner Enterprises Shares

Citigroup has reaffirmed its sell rating on shares of Werner Enterprises (NASDAQ: WERN), according to a report released on the morning of January 15, 2021. The financial institution has set a price target of $34.00 on the transportation company’s stock, indicating caution among analysts regarding its future performance.

In addition to Citigroup, several other research analysts have weighed in on Werner Enterprises. On January 13, 2021, Evercore raised its target price from $20.00 to $31.00 while maintaining an “underperform” rating. Weiss Ratings reaffirmed a “sell (d)” rating on December 22, 2020, emphasizing a bearish outlook. Similarly, Stifel Nicolaus adjusted its price objective from $26.00 to $29.00, categorizing the stock as a “hold” on January 14, 2021. Wall Street Zen downgraded the stock from “hold” to “sell” on November 8, 2020, further reflecting the cautious sentiment. On January 8, Susquehanna also increased its price target from $23.00 to $29.00, assigning a “neutral” rating.

Currently, MarketBeat.com indicates that two research analysts rate the stock as a buy, eight have issued a hold rating, and five recommend selling. The consensus rating for Werner Enterprises stands at “Reduce” with an average price target of $32.57.

Recent Financial Performance

Werner Enterprises recently reported its quarterly earnings results on February 5, 2021. The company posted earnings per share (EPS) of $0.05, falling short of the consensus estimate of $0.09 by $0.04. The total revenue for the quarter was $737.64 million, below analysts’ expectations of $767.51 million. This revenue represents a 2.3% decrease compared to the same quarter in the previous year.

The company’s return on equity was a modest 0.04%, and it reported a negative net margin of 0.48%. In the same quarter last year, Werner Enterprises had an EPS of $0.08. Analysts anticipate that for the current fiscal year, Werner will post an EPS of $1.27.

Dividends and Institutional Activity

On January 21, 2021, Werner Enterprises declared a quarterly dividend of $0.14 per share, which was distributed to investors of record as of January 5, 2021. This dividend yields approximately 1.6% on an annualized basis, amounting to a total of $0.56 per share. Notably, the company’s dividend payout ratio stands at 136.59%, indicating a substantial portion of earnings is returned to shareholders.

Recent activity among institutional investors reveals shifting stakes in Werner Enterprises. The State of Alaska Department of Revenue increased its holdings by 1.1% during the fourth quarter, now owning 30,464 shares worth approximately $914,000. Caitong International Asset Management Co. Ltd raised its stake by 57.8% in the second quarter, owning 1,018 shares valued at $28,000 following an additional purchase. Other firms, including UBS AM, Nisa Investment Advisors LLC, and CANADA LIFE ASSURANCE Co, have also adjusted their positions in the company.

Currently, institutional investors and hedge funds collectively own 89.32% of Werner Enterprises’ stock, reflecting strong institutional confidence despite the mixed ratings from analysts.

About Werner Enterprises

Founded in 1956 by Clarence L. “Chris” Werner, Werner Enterprises is headquartered in Omaha, Nebraska. The company has evolved from a one-truck operation into one of North America’s largest transportation and logistics providers. It offers a variety of services, including full truckload dry van services, dedicated contract carriage, intermodal transport, and brokerage solutions. Werner also provides value-added services such as warehousing, freight management, and fleet maintenance through its extensive network of terminals and service centers.

As investors and analysts continue to monitor Werner Enterprises, the coming months will be critical in assessing the company’s strategies and performance in the competitive transportation sector.