Too Early to Walk Away

Research evidence excerpt

Too Early to Walk Away

Equity Research

Earnings Preview — July 8, 2026

Logistics

Parcel

Rail

Trucking

2Q26 Transports Earnings Preview

Rating Changes

Our Call Rating Price Target

Ahead of earnings we're raising estimates as we see further freight cycle improvement. Ticker Curr. Prior Curr. Prior

Debate persists on what's left for stocks, but we think it's too early to get defensive. We ODFL OW EW $250.00 $235.00

believe rails continue to catch up and see opportunity on LTL pullback.

Too Early to Abandon the Cycle - The key Transports debate is whether this cycle has Christian Wetherbee

been fully pre-traded given extended valuation, particularly across the truck complex. Equity Analyst | Wells Fargo Securities, LLC

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

We'd argue that it's too early in the cycle to walk away, as demand is just beginning to

Robert H. Salmon, CFAinflect and capacity is likely to progressively tighten but acknowledge that multiples

support a degree of selectivity. This leads us to prefer rails on '26 volume inflection and EquityRobert.H.Salmon@wellsfargo.comAnalyst | Wells Fargo Securities,| 212-214-5016LLC

'27 pricing inflection.

Ryan Deveikis

Associate Equity Analyst | Wells Fargo Securities, LLC

Rails Estimates Moving Higher, CSX Remains Favorite - We are taking our 2Q26 EPS Ryan.Deveikis@wellsfargo.com | 212-214-8040

estimates up 4% for the rails and 7% for eastern rails, CSX and Norfolk Southern. Volume Matthew Hortopan

was up ~4% in 2Q and is trending at the upper end of the 5-year historical band. We Associate Equity Analyst | Wells Fargo Securities, LLC

expect mix to be neutral/positive given strength across commodities and pricing should Matthew.F.Hortopan@wellsfargo.com | 212-214-5009