Old Dominion Freight Line (ODFL) January revenue per day is tracking below seasonal norms, declining 6.8%, but management believes recent performance and weather-related catch-up should help close the gap, Morgan Stanley said in a Thursday note.

The company's Q1 operating ratio expected to be in the range of 78% to 78.4%, which is below Morgan Stanley and consensus estimates of 77.5% and 77.8%, respectively.

With the company eyeing a seasonal 7% revenue growth in Q2 from Q1, with an associated 300 to 350 basis points improvement in operating ratio, Morgan Stanley said that the growth would imply a year-on-year flat operating ratio in Q2 with "materially stronger improvement potential" as volumes recover further.

Following Old Dominion Freight Line's Q4 results, Morgan Stanley lowered its earnings per share forecast for fiscal 2026, 2027 and 2028 to $5.25, $6.42, and $7.48 from $5.32, $6.46, and $7.56 before. This further compares with consensus of $5.01, $5.89, and $6.56.

Morgan Stanley raised its price target on the company to $209 from $190 and maintained its overweight rating.

Price: 201.75, Change: -6.79, Percent Change: -3.26