Werner Enterprises' (WERN) restructuring of its one-way truckload services is expected to result in less cyclical earnings and improve overall profitability, Morgan Stanley said in a note Monday.

The realignment also pushes the company further into its dedicated business following the acquisition of FirstFleet, with dedicated now expected to contribute 53% of total revenue, according to the note.

"All of this points to upside to normalized earnings per share and less volatility of earnings through a cycle, though exactly how much, remains to be seen," Morgan Stanley said.

Integrating the FirstFleet acquisition and the realignment of the one-way truckload business into its outlook, the brokerage raised its 2026, 2027 and 2028 EPS forecast to $1.17, $2.42 and $3.52, respectively, from $1.02, $2.06 and $3.09 previously.

Morgan Stanley increased its price target to $45 from $37, and maintained its overweight rating on the stock.

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