Forward Air, Knight-Swift trend higher after J.B. Hunt shows recovery ahead
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Transportation companies largely rallied after J.B. Hunt Transportation Services (NASDAQ:JBHT) reported second quarter earnings.
JBHT rose 2% with analysts expecting recovery ahead after a disappointing quarter.
Forward Air Corporation (NASDAQ:FWRD) was up 4.2%, Knight-Swift Transportation Holdings (NYSE:KNX) rose 1.1%, Schneider National (NYSE:SNDR) was up 3.2%, Hub Group (NASDAQ:HUBG) increased 4.3% and Werner Enterprises (NASDAQ:WERN) rose 2% on Wednesday. Fedex Corporation (NYSE:FDX) was down 2.3% and CSX Corporation (NASDAQ:CSX) was little changed. 
Baird Equity Research noted that JBHTâs earnings show moderating pressure ahead even as the freight recession continues. The firm bumped rival FWRD to Outperform.
Bairdâs top transport ideas beyond FWRD include KNX, SNDR, HUBG, WERN, FDX and CSX, âwhich reflect a mix of the earliest-cycle transport exposure, more company-specific drivers, and discounted valuations.â
In addition, âgrowing risk of a YELL failure and the related industry capacity shock should help counter cyclical headwinds and bolster pricing/volume until freight markets fully recover,â Baird wrote in a note.
Yellow Corporation (NASDAQ:YELL) is under pressure as the International Brotherhood of Teamsters said on Tuesday the union is preparing to strike after YELL failed to make $50M in union contributions for the month of June. Shares are up more than 7% on Wednesday
âWe believe it would be extremely difficult for Yellow to recover from a full-blown strike given its precarious financial status,â Cowen wrote on Tuesday. During the pandemic, YELL received a $700 million loan from the Treasury Department.
Baird noted that YELLâs situation âcontinues to deteriorate.â
âA YELL failure would clearly benefit other (especially non-unionized) carriers such as ODFL, which is reflected in the stock having rallied ~30% over the past ~6 weeks,â Baird said.
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