Dahlman Rose Lowers CNW Estimates, Raises PT To $39

Con-Way, Inc. (NYSE: CNW) expects to report 4Q10 LTL operating income of $2 MM, well below Dahlman Rose's estimate of $25 MM.

“We are disappointed in the company's lack of earnings performance but are confident that most of the issues can be sorted out with continued focus on pricing,” Dahlman Rose writes.

“To reflect the lowered guidance as well as healthcare and weather cost headwinds in 4Q10 we are reducing our 4Q10 EPS estimate to $0.01 from our prior estimate of $0.25,” Dahlman Rose writes.

“Our 2010 estimate decreases to $0.46/sh from $0.70/sh, and our 2011 estimate changes to $1.95/sh from $2.45/sh. As we believe most investors will begin to look past 2011 to value their investments, we are introducing our 2012 EPS estimate of $2.80. Our target changes from $36 to $39, which is derived by applying a 14x multiple to our new 2012 EPS.”

Con-Way currently trades at $34.83.