Resetting the Value Proposition

Research evidence excerpt

Resetting the Value Proposition

Equity Research

Industry Update — June 18, 2026

Logistics

Parcel

Rail

Trucking

Reset vs. De-Rate as Fundamentals Remain Strong

Our Call Christian Wetherbee

Transports have underperformed this week with little/no fundamental change. We Equity Analyst | Wells Fargo Securities, LLC

Christian.Wetherbee@wellsfargo.com | 212-214-8053

suspect extended valuation is the driver. That makes sense, but this appears more of a

Robert H. Salmon, CFAtemporary reset, vs. broader cyclical de-rating, likely generating opportunity.

Equity Analyst | Wells Fargo Securities, LLC

Robert.H.Salmon@wellsfargo.com | 212-214-5016

Montgomery Valuation Reset Underway - While stocks are down 7% on average this Ryan Deveikis

week, the group has performed well post the Montgomery ruling in mid-May (+10%). Associate Equity Analyst | Wells Fargo Securities, LLC

Rail multiples are down 1x this week, TL by 2x and LTL by 4x. Rail multiples are now even Ryan.Deveikis@wellsfargo.com | 212-214-8040

with mid-May, LTL is only 1x higher and TL is 3x higher. Considering estimates haven't Matthew Hortopan

moved to capture improving fundamentals (will happen through previews), this suggests Associate Equity Analyst | Wells Fargo Securities, LLC

relatively attractive valuation for rails, followed by LTLs. Matthew.F.Hortopan@wellsfargo.com | 212-214-5009

Rails/LTLs Most Reset - Using pre/post Montgomery (5/14), we think rails and LTLs are

closer to resetting value as shares (ex-ODFL & ARCB) are ~in line with 5/13 levels. For the

LTLs May updates have been favorable, and rail volume growth has accelerated. The TLs

are more nuanced, as the group's '27 estimates benefit the most from Montgomery while

shares are up the most. JB Hunt screens better as its multiple expansion is similar to TL,