TFII Earnings Trough And Freight Recovery Expectations Will Likely Restrain Near-Term Upside

Analysts have modestly raised their price target on TFI International from approximately $97 to about $111, citing expectations for a freight cycle recovery into 2026 and improving TForce Freight service metrics, despite near term earnings headwinds.

Analyst Commentary

Recent Street research on TFI International reflects a mixed backdrop, with several Bearish analysts trimming price targets in response to softer near term fundamentals and management's conservative outlook. While some major firms have nudged targets higher, the aggregate range of estimates highlights lingering uncertainty around the pace and magnitude of earnings recovery.

Bearish analysts have generally cited weaker than expected guidance for the upcoming quarter, soft freight trends, and ongoing integration and execution risks within the U.S. operations as reasons for more cautious valuation frameworks. Even where ratings remain positive, the recalibrated targets indicate a preference to wait for clearer evidence of freight cycle inflection and sustained margin improvement.

On the more constructive side, JPMorgan and a handful of others have modestly raised targets, arguing that TFI's improving service metrics and eventual freight recovery can support upside over a multi year horizon. Nonetheless, these more optimistic views are tempered by acknowledgment that near term earnings may remain under pressure as the company navigates a challenging demand environment.

Overall, the latest target changes coalesce around a thesis that TFI is approaching an earnings trough, but that the timing and trajectory of recovery remain key debate points. This has led to a narrower spread of targets, with upside scenarios increasingly contingent on management's ability to execute cost actions and capture operational improvements, particularly in less than truckload operations.

Bearish Takeaways

• Bearish analysts have reduced price targets after management issued fourth quarter guidance that was well below prior expectations, reinforcing concerns that earnings may undershoot earlier recovery timelines.
• Lowered targets from Bearish analysts reflect heightened sensitivity to valuation, as multiples remain toward the upper end of historical ranges despite near term margin pressure and limited visibility on volume acceleration.
• Some Bearish analysts remain cautious on TFI's U.S. less than truckload execution, flagging operational risk and integration complexity as potential constraints on earnings growth and return on invested capital.
• Neutral and Underperform stances among Bearish analysts underscore the possibility that consensus estimates for 2025 and 2026 may still be too optimistic if the freight cycle recovery is slower or more muted than currently assumed.

What's in the News

• Approved an increase to the quarterly dividend to $0.47 per common share, payable January 15, 2026, for an expected aggregate payout of $38.7 million, signaling confidence in cash flow and long term earnings power (Key Developments)
• Board of Directors authorized a new share buyback plan, reinforcing management's commitment to returning capital to shareholders alongside organic and acquisition driven growth (Key Developments)
• Launched a normal course issuer bid to repurchase up to 7,667,696 common shares, about 9.32% of outstanding stock, with all repurchased shares to be cancelled, with the objective of enhancing per share value (Key Developments)
• Reported cumulative repurchases of 2,776,500 shares for $268.3 million under the prior buyback, including 931,500 shares bought between July 1 and October 30, 2025, highlighting active capital deployment (Key Developments)
• Added to the FTSE All World Index, which may broaden the shareholder base through increased index fund and ETF ownership (Key Developments)

Valuation Changes

• The fair value estimate has risen from approximately CA$96.67 to about CA$111.33, implying a higher long-term intrinsic value outlook.
• The discount rate has edged lower from about 7.79 percent to roughly 7.68 percent, reflecting slightly reduced perceived risk in the cash flow profile.
• The revenue growth assumption has increased from roughly 1.61 percent to about 2.09 percent, indicating a modestly stronger top-line growth outlook.
• The net profit margin has eased from around 6.87 percent to approximately 6.51 percent, incorporating slightly lower expected profitability levels.
• The future P/E multiple has risen from about 11.5x to roughly 13.8x, signaling a higher valuation multiple applied to forward earnings.