Knight-Swift Transportation's (KNX) earnings in the next two quarters will be impacted by severe weather disruptions and shipper paralysis due to uncertainty over new tariff implementations, BofA Securities said in a note on Tuesday.

"We lower our Q1/Q2 EPS estimates by 35%/20% to $0.20/$0.38, below Knight-Swift's target of $0.29 to $0.33 and $0.46 to $0.50, and Street's $0.30/$0.46," the firm said.

The truckload, less-than-truckload, and intermodal segments are experiencing soft market conditions, and BofA's truck shipper survey indicates that freight demand has entered recessionary levels, according to the note.

Spot rates for truckload have fallen to $1.50 per mile, a breakeven level for truckers, down from $1.65 per mile in January, putting further pressure on Knight-Swift.

BofA expects Knight-Swift to reduce its truckload fleet to 21,900 tractors from over 22,220 in Q4 and its operating ratio will rise in Q1, indicating deteriorating efficiency.

The firm also noted that potential tax policy changes could influence valuations, but remains concerned about decelerating business, particularly as tariff impacts unfold.

BofA downgraded its rating on the company's stock to neutral from buy and reduced the price objective to $46 from $66.

Price: 43.36, Change: -0.13, Percent Change: -0.30