TFI International: Highlights from Call with the Company and Model Update

Research evidence excerpt

TFI International: Highlights from Call with the Company and Model Update

up in Logistics Adj. EPS - 27E ($) 7.50 8.63 15.0%

remain supportive of the TFII Overweight thesis.

Quarterly Forecasts (FYE Dec)

• LTL guide disappoints amid network challenges. Management guided 3Q Adj. EPS ($)

adj. EPS to $1.70-1.80, which came in +6% above the Street at the midpoint, 2025A 2026E 2027E

framed by 500-600bps of YoY adj. OR improvement in Truckload and 250- Q1 0.76 0.69A 1.59

Q2 1.34 1.85A 2.30

350bps in Logistics, with flat OR in LTL which stood out as the clear Q3 1.20 1.74 2.37

disappointment. A surge in low-priced 3PL blanket freight pushed shipments Q4 1.09 1.83 2.39

up +13.2% QoQ and +7.5% YoY while revenue per shipment ex-fuel fell -2%, FY 4.39 6.11 8.63

overtime costs increased, and service began to slip. Management noted the fix

Style Exposure

is squarely on price, as the commercial team is working to reprice underpriced

3PL blanket lanes, aided by new pricing software, which should drive volume

incrementally lower as rates move more in-line with the market.

• Limited read-through to peers. Management noted U.S. and Canadian LTL

demand remains soft with no meaningful TL spillover yet, a somewhat

divergent view from recent commentary from peers and our industry

conversations (details here). That said, we do not view TFI as the cleanest

comparison to peers reporting later this week although the 3PL volume surge

appears to have happened at several carriers, implying that volume surprised

to the upside. While we do not believe demand has significantly inflected just

yet, we continue to expect solid July tonnage trends from peers this week, along

with commentary that points to an improved demand backdrop with

incremental truckload spillover freight.