Knight-Swift: Threading the Needle

Research evidence excerpt

Knight-Swift: Threading the Needle

$0.71-$0.77, Quarterly Forecasts (FYE Dec)

with the low end sitting at current consensus and the $0.74 midpoint implying Adj. EPS ($)

~4% upside. One-way truckload is the primary driver of sequential 2025A 2026E 2027E

improvement as recently negotiated bids continue to take effect. Overall truck Q1 0.28 0.19A 0.78

Q2 0.35 0.63A 1.02

count and utilization are both expected to remain roughly stable sequentially Q3 0.32 0.80 1.04

as the TL segment is expected to see 650-750bps of YoY OR improvement, Q4 0.31 0.95 1.16

which would land it in the high-80s range. The guidance also bakes in offsets FY 1.25 2.56 4.00

including a QoQ fuel headwind in both TL and LTL, lower equipment gains

Style Exposure

versus 2Q, and modest, targeted driver-pay investments beginning in 3Q.

• Read-throughs are mixed across sub-sectors. Accelerating double-digit

contract renewals and tender rejection rates running roughly twice market

levels bodes well for TL peers, though we believe this is largely offset by

continued pressure on driver recruitment and retention as well as the targeted

driver-wage investments the industry has deployed sooner than initially

expected. The LTL read-through is positive given that shipments accelerating

through June corroborates our recent industry discussions (details here),

though the +HSD jump in weight per shipment is more idiosyncratic to a new

mix across the expanded network. For Brokers, the read-through is mostly

negative as the Logistics segment saw -350bps YoY and -120bps QoQ of gross

margin compression as spot rates accelerated rapidly throughout the quarter.

• 2Q26 beat expectations. Adjusted operating income came in +$0.10 above

JPMe and +$0.09 above the Street, led by Truckload with adj. operating income