LSTR · Landstar System
Conviction · Low · more likely to lag the S&P 500 over the next three months
Wrong if: a daily close above $164.72
Note written ·
Price against the kill line
9.1% clear of its kill line on the 13 November 2026 close.
How to read this
This note expects the shares to lag the market, so its kill line sits above the price: a close above the red mark would prove the view wrong. Prices run from low on the left to high on the right. The dot is where the stock closed on 13 November 2026, left of the mark while it is below the line; a dot right of the mark has closed through it.
The scale is stretched near the line, so close calls are easy to see. More than 8% from the line, the stock reads well clear, with a hollow dot to show the figure is off the drawn scale.
The kill line is the research note's own test. The portfolio sells on business facts, not on a price. How the portfolio decides
Three months against the kill line
Daily closes, to . Red: the kill line, a daily close above $164.72, on record since 11 November 2026. The shares are down 22.4% since the close; the S&P 500 is down 2.1% over the same sessions. Figures in the note can cover a different window.
Kill line
A daily close above $164.72, just over the 50-day average of closes, which would show the shares leading the S&P 500 and prove this call wrong. Fourth-quarter insurance and claims expense below 9% of BCO revenue with earnings above consensus would also show the shares leading.
Research onlyNot in the portfolio.
Key figures from the filings · Industrials
Quarter to 26 September 2026, filed 28 October 2026; valuation at the 13 November 2026 close
- Revenue, latest quarter ($M)
- 1,512
- Revenue, change on a year (%)
- +25.4
- Operating margin (%)
- 4.3
- Free cash flow, four quarters ($M)
- 158
- Price to earnings (×)
- 31.5
- Free-cash-flow yield (%)
- 3.1
All filed numbers
What Landstar System reports to the SEC in its quarterly and annual filings. Each group states its period and filing date once; a figure dated otherwise says so. Built from the filings known on .
| Quarter to | Revenue ($M) | On a year (%) | Operating margin (%) |
|---|---|---|---|
| first filed | 1,512 | +25.4 | 4.3 |
| first filed | 1,432 | +18.2 | 4.6 |
| first filed | 1,171 | +1.6 | 4.5 |
| first filed | 1,175 | −2.9 | 2.5 |
| first filed | 1,205 | −0.7 | 2.2 |
| first filed | 1,211 | −1.1 | 4.6 |
| Pre-tax income ($M) | 65.2 |
| Net income ($M) four quarters: 160 | 48.0 |
| Diluted shares, change on a year (%) against the quarter to 27 September 2025 | −2.1 |
| Operating cash flow ($M) | 171 |
| Capital spending ($M) | 13.8 |
| Free cash flow ($M) | 158 |
| Cash and short-term investments ($M) | 351 |
| Debt ($M) | Not available |
| Net cash, cash less debt ($M) | Not available |
| Deferred revenue ($M) | Not reported |
| Backlog, orders not yet delivered ($M) | Not reported |
| Receivables ($M) | 892 |
| Inventory ($M) | Not reported |
| Shareholders' equity ($M) | 830 |
| Market value ($M) | 5,046 |
| Enterprise value, market value plus net debt ($M) | Not available |
| Enterprise value to sales (×) | Not available |
| Enterprise value to operating income (×) | Not available |
| Price to earnings (×) | 31.5 |
| Price to book value (×) | 6.1 |
| Free-cash-flow yield (%) | 3.1 |
Short interest (FINRA, settled 15 October 2026, published 26 October 2026): 4.8% of shares outstanding sold short, 5.4 days of average trading to cover, −1.0% since the previous report.
| Window | Bought | Sold |
|---|---|---|
| 90 daysfrom | $715K | $0 |
| 12 monthsfrom | $715K | $2.8M |
The thesis
Landstar System is more likely to lag the S&P 500 over the next three months. Third-quarter truck revenue per load rose about 25% from a year earlier, but earnings of $1.42 per share missed the consensus by 24 cents on about $21 million of claims costs (Landstar 8-K, 27 October 2026; FreightWaves, 28 October 2026). The fourth-quarter report, expected around 27 January 2027, decides whether claims costs normalize and pricing reaches profit.
Morgan Stanley maintained its Underweight rating and lowered its price target to $130 on 11 November 2026 (company news headline). The shares closed at $148.02 on 12 November 2026, 22.0% lower than three months earlier, and below both the 50-day average of $164.18 and the 200-day average of $176.04 (adjusted daily closes).
The market has already marked the shares down for the claims miss. Nothing filed since the report shows claims costs falling.
Bullish and bearish views on Landstar System, Inc.
The bull case on Landstar System, Inc. (LSTR), in brief: pricing power shows in reported numbers. The bear case: claims costs erased the pricing gain.
Bull case
- Pricing power shows in reported numbers. Truck revenue per load rose about 25% from a year earlier and 7.5% from the second quarter, and truck revenue reached $1.407 billion, up 29% (Landstar 8-K, FreightWaves, 27 October 2026).
- October accelerated further. Management said on the earnings call that October truck loads ran about 7% above the prior year and revenue per load about 29% higher (FreightWaves, 28 October 2026).
- Owner-operator capacity is growing. Business-capacity owner-operator (BCO) trucks rose by 165 to 8,709, the strongest quarterly gain since the third quarter of 2021, and BCO turnover improved 480 basis points to 26.6% (Landstar 8-K, FreightWaves, 27 October 2026).
- The CEO bought shares. President and CEO Frank Lonegro bought 5,000 shares on 30 October 2026 at $142.92, per a Form 4 filed with the SEC on 2 November 2026. The shares closed at $148.02 on 12 November 2026.
- Cash returns continue. Landstar repurchased 232,645 shares for $41.4 million in the third quarter and declared a $0.44 quarterly dividend payable 8 December 2026 (Landstar 8-K, 27 October 2026).
- Two brokers rate the shares Overweight. Stephens set a target of $210 and Wells Fargo $215 after the report, on 28 October 2026, both above the $148.02 close.
Bear case
- Claims costs erased the pricing gain. Insurance and claims expense was $55.3 million against $33.0 million a year earlier, or 9.4% of BCO revenue. It included about $13.0 million of adverse reserve adjustments and $8.0 million from prior-year claims (Landstar 8-K, FreightWaves, 27 October 2026).
- Margins narrowed as rates rose. Variable contribution margin fell 10 basis points to 14%, and the adjusted operating margin fell 220 basis points to 30.9% (FreightWaves, 28 October 2026).
- Targets were cut across the board. Morgan Stanley cut to $130 (Underweight) on 11 November 2026. Susquehanna cut to $160 (Neutral) on 2 November 2026. Truist ($160, Hold), JPMorgan ($172, Neutral), Stifel ($179, Hold), Evercore ISI ($182, In-Line) and UBS ($185, Neutral) cut on 28 October 2026. Seven of the nine post-report targets other than Morgan Stanley's sit at or below $195.
- Industry rate growth is slowing. The Cass Truckload Linehaul Index rose 10.1% from a year earlier in September, down from 11.3% in August (FreightWaves, 13 October 2026). Revenue per load growth depends on that rate backdrop holding.
- Macro costs remain heavy. Benzinga reported record diesel prices and the first Federal Reserve rate hike since 2023 in September. J.B. Hunt's profit warning on diesel on 16 September 2026 pulled other freight stocks lower the same day.
- Legal overhang persists. The appeal of the El Paso Cabral judgment of 13 January 2026, about $22.9 million plus roughly $3.7 million of interest, is pending. A law firm, Levi & Korsinsky, announced an investigation of Landstar on 29 October 2026.
Price setup
The shares closed at $148.02 on 12 November 2026. That is above the 6 November 2026 close of $143.34 and 35.2% below the quoted 52-week high of $228.46, set intraday on 8 June 2026. The 52-week closing low is $121.51, from 20 November 2025.
The 50-day average of closes is $164.18 and the 200-day average is $176.04, both as of 12 November 2026 and both above the last close. A recovery to the 50-day average would require a gain from the post-report range of $143.34 to $148.02 seen in closes between 5 November 2026 and 12 November 2026.
The price already reflects the claims miss: the three-month decline is 22.0%, and the nine post-report targets run from $160 to $215 while Morgan Stanley's is $130. The earnings date has passed, and the next report is not due until late January 2027.
Catalysts ahead
- ~16 November 2026 (est.): Cass Transportation Index report for October 2026. Shows whether truckload linehaul rate growth is holding near the 10.1% reported for September, the pricing backdrop for Landstar's fourth quarter.
- 17 November 2026: Record date for Landstar's $0.44 quarterly dividend. The dividend, payable 8 December 2026, sits next to the $41.4 million of third-quarter share repurchases as a cash return.
- ~9 December 2026 (est.): Cass Transportation Index report for November 2026. A second month of rate data tests whether October's pricing strength persisted.
- ~27 January 2027 (est.): Landstar fourth-quarter 2026 results. Settles whether claims costs normalize and whether per-load pricing converts into earnings; the case turns on this report.
What would change the view
A daily close above $164.72, just over the 50-day average of closes, which would show the shares leading the S&P 500 and prove this call wrong. Fourth-quarter insurance and claims expense below 9% of BCO revenue with earnings above consensus would also show the shares leading.
What it trades with
Landstar trades with other freight and trucking names. J.B. Hunt's 16 September 2026 profit warning on diesel pulled Knight-Swift, XPO and Old Dominion lower the same day (Benzinga). Landstar's asset-light model passes fuel surcharges on BCO loads through to the owner-operator, so diesel reaches the company through capacity and margins and not directly. Interest-rate moves also affect it as a cyclical stock.
The evidence, claim by claim (8)
- Third-quarter 2026 diluted earnings per share were $1.42 against $0.56 a year earlier; revenue was $1.512 billion, up 25%; net income was $48.0 million. Landstar 8-K, third-quarter earnings release · as of
- Truck revenue per load rose about 25% from a year earlier and 7.5% from the second quarter; truck loads rose about 3% to 500,650. Landstar 8-K; FreightWaves · as of
- Insurance and claims expense was $55.3 million against $33.0 million a year earlier, including about $13.0 million of adverse actuarial reserve adjustments and $8.0 million of prior-year claim development. Landstar 8-K, third-quarter earnings release · as of
- Earnings of $1.42 per share were 24 cents below the consensus estimate; revenue was roughly in line. FreightWaves, Landstar third-quarter review · as of
- October truck loads ran about 7% above the prior year and revenue per load about 29% higher, per management on the earnings call. FreightWaves, Landstar third-quarter review · as of
- CEO Frank Lonegro bought 5,000 shares on the open market on 30 October 2026 at $142.92. SEC Form 4 filed 2 November 2026 · as of
- Morgan Stanley maintained its Underweight rating on Landstar and lowered its price target to $130. Company news headline, 11 November 2026 · as of
- Cass Truckload Linehaul Index rose 10.1% from a year earlier in September 2026, after 11.3% in August; freight shipments rose 1.9% from a year earlier. FreightWaves, Cass September report · as of
Sources
- LANDSTAR SYSTEM INC - Form 8-K - FY2026 · sec.gov
- Insurance claims adjustments tank Landstar's otherwise strong Q3 · freightwaves.com
- Cass: TL linehaul rates up 10% in September, shipment counts remain positive · freightwaves.com ·
- Landstar (LSTR) Q3 2026 Earnings Call: Truck Pricing Surges as Claims Costs Rise · mitrade.com ·
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