Werner Enterprises Inc. (WERN): 2Q26 Trucking EBIT Above Consensus, Logistics EBIT Light; Buy for Ongoing Rate Recovery

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Werner Enterprises Inc. (WERN): 2Q26 Trucking EBIT Above Consensus, Logistics EBIT Light; Buy for Ongoing Rate Recovery

spot exposure; revenue per mile expectations in 3Q26 are

up 10-13% YoY. Within Dedicated, WERN raised expectations for revenue per truck

per week up 3-5% YoY in 2026 versus flat to up 3% prior. The company’s combined

trucking fleet is expected to grow 16-18% YoY in 2026 (lowered from +23-28% YoY

prior to reflect the lower 2Q fleet base given restructuring efforts and a slower pace of

driver hiring); note YoY growth is being driven by the FirstFleet acquisition adding ~2.4k

trucks within Dedicated.

Estimates: Our prior FY26/27/28 EPS estimates of $1.10/$2.10/$2.75 now stand at

$1.10/$2.15/$2.80. Our updated estimates primarily reflect the slightly lower base EPS

and fleet trajectory (based on the lower 2Q fleet base), offset by higher rate, utilization,

and better margin expectations versus prior. We remind that WERN’s acquisition of

FirstFleet is expected to be immediately accretive to earnings, with additional upside

once $18M of synergies begin to materialize (Link).

Looking Ahead: See our Outlook for our broad thoughts on the truckload and LTL

set-up this year and recall that we upgraded truckers in June 2025 to position for more

early-cycle leverage while moderating our ratings on the more defensive names of the

cyclical group, Rails and intermodal-adjacent names such as JBHT (see: Pivot To

Trucking: Upgrade LTL/Truckload Stocks to Buy for Operational Torque; Downgrade

Rails/JBHT to Neutral). See Exhibit 6 of our 1Q26 Preview for our 2026 revenue per

mile scenarios based on assumptions around spot and contract rate development,

and note that the current spot rate environment suggests we are tracking closer to