Stifel analyst rates Knight Transportation 'Buy'

NEW YORK -- A Stifel Nicolaus analyst on Tuesday raised his rating for Knight Transportation Inc. to "Buy" from "Hold," saying that the trucking operator's shares are poised for growth.

THE BIG PICTURE: Analyst John Larkin also put an $18 price target on Knight. He predicted that the company will increase its earnings per share at an annual rate of 11 to 14 percent, slightly below the 15 percent it previously forecast.

Larkin said that while growth may be slower, investors seem to have finally accepted it. He called the new expectations "respectable" and noted that they're driven by the expansion of the company's new asset-light businesses, which will allow it to stay debt-free.

THE OPINION: "Since we last recommended the stock five years ago, the company has re-invented itself into a slower growth, multi-modal transportation services company that remains entrepreneurially driven by one of the best instinctive operators, in our view, in the space," Larkin wrote in a note to investors.

THE SHARES: Up 21 cents to $15.18 in morning trading.