Old Dominion Freight Line Stock: Is ODFL Underperforming the Industrial Sector?

Thomasville, North Carolina-based Old Dominion Freight Line, Inc. (ODFL) is one of the largest North American less-than-truckload (LTL) motor carriers and provides regional, inter-regional and national LTL services. With a market cap of $34.5 billion, Old Dominion’s offerings also include various value-added services, including container drayage, truckload brokerage, and supply chain consulting.

Companies worth $10 billion or more are generally described as “large-cap stocks,” Old Dominion fits right into that category, with its market cap exceeding this threshold, reflecting its substantial size, influence, and dominance in the trucking industry.

Despite its strengths, ODFL stock has tanked 28.8% from its all-time high of $233.26 touched on Nov. 11, 2024. Meanwhile, ODFL has dropped 16.5% over the past three months, significantly underperforming the Industrial Select Sector SPDR Fund’s (XLI) 2.5% decline during the same time frame.

Old Dominion’s performance has remained grim over the longer term as well. ODFL stock has plunged 14.7% over the past six months and 21.1% over the past 52 weeks, lagging behind XLI’s 74 bps gains over the past six months and 8.9% returns over the past year.

To confirm the recent downturn, ODFL has traded mostly below its 50-day moving average since early December and below its 200-day moving average since mid-December with some fluctuations.

Old Dominion Freight Line’s stock prices soared over 5.4% and maintained a positive momentum for the next four trading sessions after the release of its better-than-expected Q4 results on Feb. 5. Although the company observed a decline in topline due to the recent economic softness which has impacted shipment volumes, its revenues of $1.4 billion which is down 7.3% compared to the year-ago quarter, surpassed the Street’s expectations by 40 basis points. Meanwhile, its earnings of $1.23 exceeded the consensus estimates by a notable 5.1%, which boosted investor confidence.

The recent downturn in ODFL stock can primarily be attributed to the broader market downturn observed in recent weeks due to policy uncertainties related to tariffs, making it difficult to assess the impact on the American economy and company financials.

Meanwhile, Old Dominion has also underperformed its peer XPO, Inc.’s (XPO) 41 bps gains over the past six months and a 9.3% decline over the past year.

Among the 22 analysts covering the ODFL stock, the consensus rating is a “Hold.” Its mean price target of $199 suggests a 19.8% upside potential from current price levels.