ODFL – Market expectations are for Uniform ROA to reach new peaks, but management may be concerned about the economy, volume, and capex

• Old Dominion Freight Line, Inc. (ODFL:USA) currently trades above historical averages relative to UAFRS-based (Uniform) earnings, with a 33.2x Uniform P/E. At these levels, the market has bullish expectations for the firm, but management may be concerned about the pace of the economy recovery, volume declines, and capex spending
  
  

• Specifically, management may lack confidence in their ability to see normalized business levels once the economy reopens and expand capacity in high-growth metro markets. Furthermore, they may have concerns about the impact of increases in the average length of haul and weight per shipment on revenue, sharp April revenue declines, and their ability to reduce maintenance capex. Additionally, they may lack confidence in their ability to sustain retail-related business growth and drive network volume recovery, and they may be overstating the strength and resiliency of the
  less-than-load (LTL) industry. Finally, they may be concerned about the impact of mom-and-pop store closures on their volume, their investments in customer service, and changes in retail supply chains driven by e-commerce adoption