Last Update 09 Jan 26

Fair value Increased 1.90%

TFII: Freight Cycle Recovery And Capital Returns Will Balance Near Term Softness

Analysts have lifted their implied fair value estimate for TFI International by about $2.74 to roughly $146.89 per share. This reflects updated assumptions for slightly faster revenue growth, a somewhat lower discount rate and a modestly higher future P/E multiple, in line with a series of recent price target increases across the Street.

Analyst Commentary

Street research on TFI International has become more active, with several firms revisiting their models, price targets and views on the freight cycle through 2026. While many are leaning constructive on the medium term, there is still a split between those focused on recovery potential and those more focused on near term freight softness and execution risks.

Bullish Takeaways

Bullish analysts are generally lifting price targets, citing expectations for tighter trucking capacity into 2026. They see this as supportive of pricing and, in turn, TFI's earnings power relative to current levels implied by recent targets.
Several research notes highlight improving service metrics at TForce Freight. They view this as an operational building block for better margins and returns when freight volumes improve, supporting a higher justified P/E multiple over time.
Some bullish analysts point to disciplined cost management and a focus on service quality. They argue that this operational discipline could help TFI translate any freight upturn into stronger incremental profits than the market is currently baking into valuation.
Commentary calling out tighter capacity and regulation driven attrition in the carrier base frames TFI as relatively well positioned for the next freight cycle. Bullish analysts see this as a reason to maintain constructive ratings even after prior guidance resets.

Bearish Takeaways

Bearish analysts point to a soft freight environment and Q4 guidance that came in well below earlier expectations. They view this as a sign that near term earnings risk is still elevated relative to some of the more optimistic 2026 themed targets.
Several research notes reference industrial demand weakness and softer October trends. They see this as weighing on Less Than Truckload volumes and limiting the pace of any near term margin recovery, even if longer term views are more constructive.
A cautious camp flags that, despite more conservative earnings assumptions, valuation multiples in some models remain toward the higher end of historical ranges. They view this as leaving less room for error if execution on cost savings or service improvements falls short.
Some bearish analysts maintain more neutral or Underperform style ratings, emphasizing that multiple headwinds are stacking up into upcoming quarters and that investors may be paying up today for a freight recovery and margin improvement that are still several reporting periods away.

What's in the News

TFI International approved a quarterly dividend of $0.47 per common share, expected to total about $38.7 million for shareholders of record on December 31, 2025, with payment scheduled for January 15, 2026 (company announcement).
The Board authorized a share buyback plan on October 30, 2025, indicating continued use of repurchases as part of its capital return toolkit (company announcement).
Under a normal course issuer bid, TFI International plans to repurchase up to 7,667,696 common shares, about 9.32% of its 82,287,807 shares outstanding as of October 21, 2025. The program will run to November 3, 2026, and all repurchased shares will be cancelled (company announcement).
Between July 1, 2025 and October 30, 2025, the company repurchased 931,500 shares for $84.9 million, bringing total buybacks under the October 21, 2024 program to 2,776,500 shares for $268.3 million (company announcement).

Valuation Changes

The fair value estimate has risen slightly from CA$144.16 to about CA$146.89 per share, reflecting updated inputs in the model.
The discount rate has edged lower from 7.80% to about 7.65%, which increases the weight of future cash flows in the valuation framework.
The revenue growth assumption has moved higher from roughly 1.69% to about 4.46%, implying a stronger expected top line profile in the updated model.
The net profit margin assumption has been trimmed from about 6.11% to roughly 5.55%, indicating a slightly more conservative view on future profitability.
The future P/E has been nudged up from about 18.93x to roughly 19.73x, signaling a modestly higher multiple being used for the terminal valuation.

Expansion in North American freight and operations efficiency initiatives are expected to enhance growth, margins, and free cash flow as economic conditions improve.
Regained high-margin clients and disciplined capital use position the company for long-term earnings gains and strategic consolidation opportunities.
Persistent weak freight demand, limited acquisition opportunities, pricing pressures, excess capacity, and rising industry costs threaten ongoing revenue, margin, and earnings growth.

Catalysts

About TFI International

Provides transportation and logistics services in the United States, Mexico, and Canada.What are the underlying business or industry changes driving this perspective?

Rising domestic and cross-border freight activity driven by North American reshoring/nearshoring and potential resolution of tariff uncertainties is expected to unlock volume growth, especially for profitable U.S.-Canada LTL trade lanes and specialized truckload; this will boost revenue and operating earnings as the macro cycle turns.
Continued investments in operational efficiency-including digitalization (Optym rollouts for linehaul and P&D), AI-driven process improvements, and a focus on asset-light brokerage models-are reducing costs, improving margins, and supporting higher free cash flow conversion as volumes recover.
Successful regeneration of the U.S. LTL salesforce and improving service quality (notably in next-day delivery and reduced missed pickups) are helping to reclaim high-margin SMB clients, setting the stage for future yield improvement and higher net margins as customer confidence strengthens over multiple quarters.
The strong free cash flow generation-supported by disciplined CapEx, cost controls, and effective working capital management-enables accelerated share buybacks and ongoing dividends, driving per-share earnings growth independent of the near-term revenue environment.
Strategic integration and future potential for disciplined, accretive M&A (once management proves control over U.S. LTL) will allow TFI to capitalize on market fragmentation and scale advantages, setting up long-term EPS and operating income growth as secular e-commerce and domestic supply chain trends continue.

TFI International Earnings and Revenue Growth

TFI International Future Earnings and Revenue Growth

Assumptions

How have these above catalysts been quantified?

Analysts are assuming TFI International's revenue will grow by 3.6% annually over the next 3 years.
Analysts assume that profit margins will increase from 4.5% today to 6.1% in 3 years time.
Analysts expect earnings to reach $562.8 million (and earnings per share of $7.44) by about September 2028, up from $368.2 million today.
In order for the above numbers to justify the analysts price target, the company would need to trade at a PE ratio of 17.2x on those 2028 earnings, down from 21.5x today. This future PE is lower than the current PE for the CA Transportation industry at 19.9x.
Analysts expect the number of shares outstanding to decline by 1.91% per year for the next 3 years.
To value all of this in today's terms, we will use a discount rate of 7.79%, as per the Simply Wall St company report.

TFI International Future Earnings Per Share Growth

Risks

What could happen that would invalidate this narrative?

Prolonged weak industrial and freight demand in North America-TFI continues to experience depressed volumes and a sluggish industrial freight environment, and both management and analysts signaled that any recovery may not occur until late 2025 or 2026. This overexposure to cyclical, sector-specific slowdowns could reduce revenues and net income for several more quarters.
Diminished acquisition-driven growth opportunities-Management indicated limited M&A opportunities and a current focus on share buybacks due to high valuations and lack of attractive targets, suggesting that TFI may struggle to sustain its historical pace of revenue and earnings growth via acquisitions.
Difficulty capturing price and yield improvements in U.S. LTL-Despite operational improvements, TFI's U.S. LTL segment faces ongoing pricing pressure and yield declines (down nearly 7% year over year), with management acknowledging it will take several quarters of consistent service enhancement before shippers reward TFI with improved rates, delaying margin and EPS expansion.
Excess capacity and lingering inefficiencies-TFI admitted to thousands of surplus doors, excess trucks and trailers, and underutilized assets, particularly in the U.S. LTL segment; slow asset rationalization and competition from better-optimized peers could continue to depress operating margins and return on invested capital.
Potential for long-term cost inflation and regulatory headwinds-While not a focus of the call, industry-wide risks such as rising labor and insurance costs, tightening emissions regulations, and necessary capital investment in technology and sustainability threaten to add pressure to net margins and cash flow if not proactively managed by TFI.

Valuation

How have all the factors above been brought together to estimate a fair value?

The analysts have a consensus price target of CA$136.602 for TFI International based on their expectations of its future earnings growth, profit margins and other risk factors. However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of CA$170.17, and the most bearish reporting a price target of just CA$96.67.
In order for you to agree with the analyst's consensus, you'd need to believe that by 2028, revenues will be $9.2 billion, earnings will come to $562.8 million, and it would be trading on a PE ratio of 17.2x, assuming you use a discount rate of 7.8%.
Given the current share price of CA$131.53, the analyst price target of CA$136.6 is 3.7% higher. The relatively low difference between the current share price and the analyst consensus price target indicates that they believe on average, the company is fairly priced.
We always encourage you to reach your own conclusions though. So sense check these analyst numbers against your own assumptions and expectations based on your understanding of the business and what you believe is probable.

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Disclaimer

AnalystConsensusTarget is a tool utilizing a Large Language Model (LLM) that ingests data on consensus price targets, forecasted revenue and earnings figures, as well as the transcripts of earnings calls to produce qualitative analysis. The narratives produced by AnalystConsensusTarget are general in nature and are based solely on analyst data and publicly-available material published by the respective companies. These scenarios are not indicative of the company's future performance and are exploratory in nature. Simply Wall St has no position in the company(s) mentioned. Simply Wall St may provide the securities issuer or related entities with website advertising services for a fee, on an arm's length basis. These relationships have no impact on the way we conduct our business, the content we host, or how our content is served to users. The price targets and estimates used are consensus data, and do not constitute a recommendation to buy or sell any stock, and they do not take account of your objectives, or your financial situation. Note that AnalystConsensusTarget's analysis may not factor in the latest price-sensitive company announcements or qualitative material.

Cross-Border Freight And Digital Efficiency Will Drive Long-term Value