Celadon Group jumps after upgrade on impending recovery

NEW YORK—Shares of truckload carrier Celadon Group Inc. rose Monday after a Stephens Inc. analyst upgraded the stock, suggesting the company is poised for growth as trucking sector begins to recover.

Analyst Thom Albrecht lifted his rating to "Overweight" or "Buy," from "Equal-Weight," predicting that supply and demand come into balance will come into balance in the fall of this year.

"With supply heading in the right direction, the stage is being set for improved freight rates and earnings during 2009 and beyond," the analyst wrote in a note to clients. "While most truckload carriers should benefit from balanced capacity, Celadon is especially attractive given its growth opportunities, operating leverage and attractive valuation."

The stock is currently about 56 percent below its highest point in the current freight demand cycle, he noted, which is the largest shortfall of any truckload carrier.

Albrecht also said the Indianapolis-based company could take advantage of the weak freight environment through acquisitions, as well as through its ramped-up sales and marketing efforts.

Truckload carriers typically dedicate an entire trailer to one customer and move the freight directly from the shipper to the receiver.

Shares rose 54 cents, or 5.2 percent, to $10.92 in afternoon trading. The stock has ranged between $6.50 and $18.22 in the past year.