JPMorgan analysts started coverage on Saia (NASDAQ:SAIA) with an Overweight rating and a $676 price target, noting they believe that Saia’s national expansion and larger network will enhance its service offerings, leading to increased volumes and market share. The company’s growth into a major national carrier is expected to boost density and reduce the need for external pickup and delivery services in local markets. This expansion also positions Saia to secure higher yields through improved service levels that showcase the company’s value compared to its competitors.

Saia’s management team has successfully managed terminal expansions in the past without compromising on margins or service quality, a trend that is anticipated to continue. Despite concerns about valuation, the analysts view the risk/reward balance as favorable, given the company’s growth prospects. Since 2017, Saia has been executing a strategic expansion, particularly into the Northeast, where it previously had no presence. This initiative led to the opening of 41 new terminals between 2017 and 2022, a 15% increase in shipments, and approximately $1.5 billion in investments across equipment, real estate, and technology.

In 2023, Saia further accelerated its expansion by acquiring 28 terminals from the defunct Yellow LTL provider for about $244 million. In 2024, the company plans to inaugurate 15-20 of these facilities, marking a record capital expenditure of $1 billion—nearly a third of its revenue and about twice the investment rate of the previous year.

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