Q: Does TFII have a growth opportunity annd capacity ahead given impacts to their business model from tariffs and trade disruption? I am trying to assess, given it has now dropped by 50%, whether it is a reasonable time to action anything for this stock and if so, what direction it should be.
5i Research Answer:
TFII has historically managed recessions very well, and used weakness in competitors to make good acquisitions. It is in good financial shape and (for now) consensus still calls for earnings growth over the next two years. That being said, the last quarter was ugly and the company itself noted a 'freight recession'. Considering that business has essentially screamed to a halt with tariff uncertainty globally, it is hard to paint a really attractive short term picture here, even at a low valuation. We think a 'do nothing' approach remains best.