It’s not a great time to be an investor in shares of TFI International (TSX: TFII) so far this year, with the name now down more than 35% year to date and 44% from all-time highs after enduring a painful plunge earlier this year that nearly saw the less-than-load trucker get its share price slashed in half.
Undoubtedly, this isn’t the first time that the $10.2 billion transport firm has taken such a hard hit to the chin, but things certainly feel gloomier this time around, especially when you consider the fact that the TSX Index is at a new high. Undoubtedly, the headwinds have weighed quite heavily on TFI, and while the latest quarter wasn’t much to get behind, I do think the current rut is something that the firm can recover from.
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TFI just crashed after a rough quarter
While there’s no shortage of hotter things to buy nowadays, I do see TFII shares as severely oversold and potentially severely undervalued, especially if management continues doing its best to make improvements in this harsh macro environment. Undoubtedly, trucking demand has faded considerably of late.
And while the demand slump may not be over yet, a pick-up in demand could be equally pronounced and maybe even a tad shocking. Indeed, the Trump trade war has been a serious risk. But as more talks go on in the second half, I do think it can pay to be a bit optimistic while most others are now pessimistic, negative, and even fearful with the name.
When it comes to the mid-cap names, the market reaction tends to overswing one way or the other. For brave investors, that’s nothing more than an opportunity to snag bargains at rock-bottom prices. Of course, catching falling knives can be dangerous, especially if we’re talking value traps.
An off year for the transport plays. The pain won’t last forever.
When it comes to TFI, though, I don’t see it as such. It’s a well-run company that fell on difficult times. And while there’s not much clarity with tariffs, I do think that staying the course is a wise idea, especially as the firm looks to improve operational efficiencies while the worst of the demand-side headwinds looks to blow over. Undoubtedly, it’s not just TFI that’s had a fall from grace this year.
Some of the biggest blue-chip names in transports have had an off year. And I think there’s ample value to be had at these depths, especially if 2026 is a year of new trade deals and a volume resurgence. Though the operational “turnaround” could take time, I do think that expectations are so low that those willing to stay invested for at least five years will have a pretty decent risk/reward tradeoff at around $123 per share, a low not seen in quite a few years.
TFII shares look way too cheap
With a nice 2.1% dividend yield and a modest 18.9 times forward price-to-earnings (P/E) multiple, perhaps it’s time to brave the name on weakness after a series of challenging quarters that sparked a vicious valuation reset. It’s not easy to be a trucker amid tariffs, but I suspect TFI will find a way to keep on trucking.
