Barclays on North America Airfreight & Ground Transportation: Supply Constraint Driving Favorable Pricing Outlook: Initiating on Truck-Load
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Up: 13 | Down: 9 | New: 24
Rating Summary:
21 Buy, 17 Hold, 1 Sell
Rating Trend:
Up
Today's Overall Ratings:
Up: 13 | Down: 9 | New: 24
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Barclays on North America Airfreight & Ground Transportation: Supply Constraint Driving Favorable Pricing Outlook: Initiating on Truck-Load
Barclays analyst says, "Demand recovery and constrained supply make for a compelling fundamental trucking story. Similar to other modes, the TL industry should benefit from improved pricing dynamics for the foreseeable future as capacity growth has been limited following the recession. Although we see potential upside across several of the TL carriers, our top ideas within the sector are J.B. Hunt (Nasdaq: JBHT) and Werner (Nasdaq: WERN). The TL carriers have benefited from material pricing gains following the end of the "great recession" as demand has recovered with only limited supply growth. We expect favorable industry pricing dynamics to be a powerful earnings driver going forward. Further, differentiation into non-traditional TL services such as intermodal is serving to bring higher returns to a historically competitive sector."
"Tight supply should support a favorable pricing backdrop for several years to come - The TL industry, like many others, faced significant demand and earnings declines during the "great recession." As a result, the industry curtailed equipment reinvestment which has driven the current truck fleet in-service age to near all-time highs. We estimate fleet replacement needs alone will require upwards of two years of new truck deliveries, significantly constraining TL capacity growth for the foreseeable future."
Barclays also initiates coverage on Heartland Express, Inc. (Nasdaq: HTLD), Knight Transportation Inc. (NYSE: KNX), and Swift Transportation Co. (Nasdaq: SWFT) with Equalweights. PT $15, $17, and $10 respectively.
Barclays analyst says, "Demand recovery and constrained supply make for a compelling fundamental trucking story. Similar to other modes, the TL industry should benefit from improved pricing dynamics for the foreseeable future as capacity growth has been limited following the recession. Although we see potential upside across several of the TL carriers, our top ideas within the sector are J.B. Hunt (Nasdaq: JBHT) and Werner (Nasdaq: WERN). The TL carriers have benefited from material pricing gains following the end of the "great recession" as demand has recovered with only limited supply growth. We expect favorable industry pricing dynamics to be a powerful earnings driver going forward. Further, differentiation into non-traditional TL services such as intermodal is serving to bring higher returns to a historically competitive sector."
"Tight supply should support a favorable pricing backdrop for several years to come - The TL industry, like many others, faced significant demand and earnings declines during the "great recession." As a result, the industry curtailed equipment reinvestment which has driven the current truck fleet in-service age to near all-time highs. We estimate fleet replacement needs alone will require upwards of two years of new truck deliveries, significantly constraining TL capacity growth for the foreseeable future."
Barclays also initiates coverage on Heartland Express, Inc. (Nasdaq: HTLD), Knight Transportation Inc. (NYSE: KNX), and Swift Transportation Co. (Nasdaq: SWFT) with Equalweights. PT $15, $17, and $10 respectively.
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