Transports Weekly Chartbook

Research evidence excerpt

Transports Weekly Chartbook

he bottom of the freight recession with a more favorable macro

backdrop vs. its last investor day that was at the top of the freight cycle. Over the medium term, we look for management to deliver potential earnings and

FCF upside from continued efficiency gains, with its target for $6 billion of FCF by 2029 driving share price upside. See our note here.

Downgrade LTL names as stock upside looks challenged, despite fundamentals supporting rising earnings: On Monday, we downgraded several

trucking stocks, following up on our “What’s priced in? Truckload” note last month. We analyzed upside scenarios for LTLs given their strong start to 2026.

Based on this assessment, we moved ODFL to Sell. We also downgraded SAIA, KNX, and CHRW to Neutral, as we find it increasingly difficult to identify

meaningful upside on fundamentals. With many trucking stocks near all-time highs, we believe elevated optimism appears reflected in valuations. We

spent much of last year arguing that Transports were undervalued, offering attractive risk/reward on prospects for a freight cycle inflection. Even with our

upbeat outlook, the pace and magnitude of the rise in Truckload spot rates have surprised to the upside year-to-date. Optimism now seems widely

dispersed across trucking stocks, driving us to a more cautious stance on the group, with valuations near all-time highs. We fear that a bullish view on the

sector increasingly relies on the belief that (1) structurally higher barriers to entry have been created in trucking making it difficult to add capacity; and (2)

trucking valuations will not be subject to significant de-rating as has occurred in every past cycle. We are skeptical on both fronts, especially the valuation