Transports Weekly Chartbook

Research evidence excerpt

Transports Weekly Chartbook

Intro – Rosa’s Reflections for the Week

2Q26 Transports Earnings Preview: Last week, we published our 2Q26 Transports Earnings Preview. We expect Transports 2Q earnings to be

among the strongest in years following the prolonged freight recession, as companies benefit from substantially tighter capacity along with

modestly improving demand. We anticipate solid y-y EPS gains given the truckload rate inflection, supporting margin recovery, with solid outlooks

indicating continued strength in the coming quarters. Last month, we downgraded a number of trucking stocks on what we deemed as extended

valuations, as we believed the improved supply-demand backdrop was well-understood (and largely priced-in) by investors. Given the pullback in

recent weeks, we upgraded KNX and SAIA back to Buy and ODFL to Neutral, as our price targets (largely unchanged) now imply enough upside to

support our ratings changes. We are still concerned about valuations across much of our coverage, with upside to shares likely to be more modest in

2H26 relative to 1H. However, we acknowledge that it is difficult to remain overly negative into rising earnings. Market view: More modest upside

expectations. We expect solid earnings across much of our coverage on the increasingly favorable supply-demand dynamic, but we also believe the

supportive backdrop for trucking rates is well-understood, with limited catalysts to drive stocks meaningfully higher in the near-term. With the

S&P500 up +10% year-to-date and the Dow Jones Transports (TRAN) Index +28%, we believe upside in 2H is likely to be modest as rising earnings

will likely be offset by PE multiple compression (note we have trimmed our target PEs across much of our coverage). At the same time, states