This weekly report presents the most recent views we are hearing from industry insiders and summarizes the research of Wolfe Research. Included are (1) key takeaways, selected shipper
comments; (2) notices of upcoming industry events; (3) key takeaways from some of our notes from the past week; (4) recent stock performance for our transport universe; (5) updated comparison tables for the airfreight & logistics group, railroads, and trucking; and (6) fuel trends for West Texas Crude Oil, On-highway diesel, Rail diesel, and Jet fuel.
This weekly report presents the most recent views we are hearing from industry insiders and summarizes the research of Wolfe Research. Included are (1) key takeaways, selected shipper comments; (2) notices of upcoming industry events; (3) key takeaways from some of our notes from the past week; (4) recent stock performance for our transport universe; (5) updated comparison tables for the airfreight & logistics group, railroads, and trucking; and (6) fuel trends for West Texas Crude Oil, On-highway diesel, Rail diesel, and Jet fuel.
This weekly report presents the most recent views we are hearing from industry insiders and summarizes the research of Wolfe Research. Included are (1) key takeaways, selected shipper comments; (2) notices of upcoming industry events; (3) key takeaways from some of our notes from the past week; (4) recent stock performance for our transport universe; (5) updated comparison tables for the airfreight & logistics group, railroads, and trucking; and (6) fuel trends for West Texas Crude Oil, On-highway diesel, Rail diesel, and Jet fuel.
Transports with Most Momentum: KNX, RRTS, CNI, KEX sounded relatively best to us, and nobody sounded particularly bad
This month’s Macro examines March and April data. As shown on Slide 8, freight vols on avg. declined 2% y/y in March and are tracking up less than 1% y/y based on preliminary April data after growing close to 3% the 1st two months of the year. Moreover, our proprietary Seasonal Freight Index (Slide 7) has dipped back below 50 the past 2 months after accelerating sharply late last year and early this year.
Our 6th Annual Global Transport Conference will take place on Wednesday, May 22 and Thursday, May 23. This report is a guide for investors attending the conference, including a list of suggested questions to ask each company and a snapshot of our earnings models.
This weekly report presents the most recent views we are hearing from industry insiders and summarizes the research of Wolfe Trahan. Included are (1) key takeaways, selected shipper comments; (2) notices of upcoming industry events; (3) key takeaways from some of our notes from the past week; (4) recent stock performance for our transport universe; (5) updated comparison tables for the airfreight & logistics group, railroads, and trucking; and (6) fuel trends for West Texas Crude Oil, On-highway diesel, Rail diesel, and Jet fuel.
This weekly report presents the most recent views we are hearing from industry insiders and summarizes the research of Wolfe Trahan. Included are (1) key takeaways, selected shipper comments; (2) notices of upcoming industry events; (3) key takeaways from some of our notes from the past week; (4) recent stock performance for our transport universe; (5) updated comparison tables for the airfreight & logistics group, railroads, and trucking; and (6) fuel trends for West Texas Crude Oil, On-highway diesel, Rail diesel, and Jet fuel.
So far, 25 of our 34 freight transport companies have reported earnings and we’ve had 11 beats, 6 misses, and 8 in-line reports in 4Q following mostly downside reports in 3Q. SWFT had the only stand-out report in our opinion, but transport stocks overall have performed well out of 4Q with our avg. stock up 4% since reporting and up 10% YTD. We continue to see a favorable backdrop for transport stocks based on our expectation for both vols and pricing to accelerate throughout the year. Our favorite stocks remain CP, FDX, CHRW, JBHT, SWFT and RRTS.
CGI reported F2Q adjusted EPS of $0.36, essentially in line with weaker revenue offset by much higher gains on sales. CGI’s OR improved 280bp y/y to 90.4%, marking a new F2Q peak in our model. Higher y/y gains on sales drove about 190bp of OR improvement and accounted for 27% of total EBIT, while material improvements in fuel efficiency and lower maintenance expense again contributed to solid margin improvement. CGI’s acquisitions and cost reductions are yielding high-end OR improvement currently among the TLs and we believe its current operating momentum is likely to continue the next several quarters. Free cash flow should also improve significantly over the next year as CGI has completed its fleet replenishment cycle. We retain our Outperform rating and we’re raising our target price to $24.