Saia's (SAIA) Q4 was a modest miss and Q1 seems relatively optimistic but consensus will likely remain the same. At the current valuation, risk-reward seems skewed to the downside, even in an upcycle, Morgan Stanley said Wednesday.

Saia missed Q1 2025 Street expectations which led to a big stock price and earnings reset. Since then, the stock price is up 75% but analysts' earnings per share forecasts for 2026 and 2027 are still down 42% and 36% from pre-reset levels. This has resulted in price-to-earnings ratio "ballooning," the firm said.

Morgan Stanley said management is doing the right things in this extended cycle trough, and is now focused on getting a return on investments and improving margins.

However, the numbers have fallen significantly and there is no evidence that consensus is going up meaningfully, even in an upcycle, the report said.

Management believes that their $2 billion investment "deserves" a return on investment in the form of higher pricing, but the competitive landscape might not cooperate, the brokerage said.

Management also pointed out operational improvements in January from its network investments, adding that it intends to match pricing with the better service quality, according to the report.

Morgan Stanley models fiscal 2026, 2027, 2028 EPS at $10.39, $12.62, and $14.53, respectively, relatively unchanged from its prior forecast of $10.42, $12.70, and $14.65.

The firm downgraded Saia to underweight from equal weight with a price target of $250.

Price: 391.89, Change: +10.25, Percent Change: +2.69