TFI International (TSX:TFII): Evaluating Value After Lower Earnings and Enhanced Capital Returns

TFI International (TSX:TFII) just released its latest quarterly results, showing a drop in sales and net income compared to last year. At the same time, the company increased its quarterly dividend and reported progress on its ongoing share buyback plan.

See our latest analysis for TFI International.

Despite bumpy earnings and softer revenue this quarter, TFI International’s 5.3% share price gain over the past three months suggests investors are still seeing long-term value even as the year-to-date share price return sits deep in the red. The one-year total shareholder return of -38.4% underscores the recent headwinds, but the buyback and dividend increase could hint at management’s confidence in the company’s long-term prospects.

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With shares trading at a considerable discount to analyst price targets and a nearly 60% gap to some intrinsic value estimates, investors must ask: Is TFI International now undervalued, or is the market accurately pricing in its future growth?

Most Popular Narrative: 15.1% Undervalued

TFI International's latest fair value estimate comes in well above its last close, hinting at a sizable gap between market price and what the most-followed narrative expects. This suggests there is more optimism about the company’s prospects under the surface, even after a rocky year.

Continued investments in operational efficiency, including digitalization (Optym rollouts for linehaul and P&D), AI-driven process improvements, and a focus on asset-light brokerage models, are reducing costs, improving margins, and supporting higher free cash flow conversion as volumes recover.

Read the complete narrative.

Curious how much free cash flow boost and digital transformation drive this bullish case? Discover which future expectations about margins, scale, and share count make up the foundation of this ambitious fair value calculation. The narrative’s assumptions may surprise even seasoned investors.

Result: Fair Value of $144.16 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, persistent weak freight demand and challenges in capturing higher prices could delay margin improvement and undermine the bullish case for TFI International.

Find out about the key risks to this TFI International narrative.

Build Your Own TFI International Narrative

If you want to challenge this perspective or just prefer hands-on analysis, it takes only minutes to dive into the data and shape your own story. Do it your way

A great starting point for your TFI International research is our analysis highlighting 2 key rewards and 2 important warning signs that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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