Transportation - Trucking: Survey Says: stay the course, Demand view (63.3) holds, Capacity falls; pricing view up

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Transportation - Trucking: Survey Says: stay the course, Demand view (63.3) holds, Capacity falls; pricing view up

ould lead to share loss while improving

revenue quality. Risks to downside remain potential outsized share loss as it raises rates,

confusion over split among customers as it rolls out new technology, and loss of parent

financial safety net.

J.B. Hunt Transport Services (JBHT)

Our $340 price objective is based on a 34.5x target multiple of our 2027 EPS estimate.

Our target multiple is above its historic range of 16x-23x, as earnings appear set to

scale from a trough level in 2025.

Risks to our PO are a slowing economic environment, an inability for the company to

raise rates to offset rising costs (driver pay, insurance, depreciation, and fuel), a severe

accident impacting costs or the company's image, or significant impacts (strikes,

network outages) to the rail network of or its relationship with two major carriers

impacting intermodal operations. Additional risks are regulatory changes impacting the

flow of freight from the highway to rail, or rapidly falling fuel prices that could

encourage freight to stay on the highway, its occasional arbitration with BNSF over rail

rates, a sustained loose capacity truckload market that may overhang Intermodal pricing,

and inability to obtain labor.

Knight-Swift Transportation Holdings Inc (KNX)

Our $98 price objective is based on a 25.5x target multiple on our 2027 EPS estimate.

Our target multiple is above its one-standard-deviation 22-year historical trading range

of 14x-26x on year ahead estimates, as it moved past trough earnings and should

benefit from reduced capacity follow through on spot and contract rate renewals.

Downside risks to our price objective are volatility at its truckload segment (particularly