Market Overview

Bank Of America Incrementally Bullish On Transportation Stocks, Upgrades Four Companies To Buy

Share:
Bank Of America Incrementally Bullish On Transportation Stocks, Upgrades Four Companies To Buy

  • Year-to-date, rail, truck and airfreight/forwarding stocks are down 20 percent.
  • Ken Hoexter of Bank Of America upgraded four transportation companies to Buy.
  • Hoexter noted that industry trends are "getting less negative."
  • In a report published Friday, Bank of America analyst Ken Hoexter demonstrated a more bullish stance on transport stocks as negative incremental data is "beginning to subside," which has historically marked an "inflection point" over the past decade for the group.

    According to Hoexter's proprietary data and surveys, rail carloads appear "primed to turn the corner" after being in negative territory since March. On a rolling four-week basis, rail carloads have rebounded from a -4.0 percent peak level at the end of May to nearly break even as of September 5.

    Looking forward, carloads should continue to improve as coal, chemical, petroleum, auto and intermodal all appear to be posting improvements.

    Related Link: Good Advice: Don't Buy Transportation ETFs Just Because It's Labor Day

    Hoexter continued that the rail group is trading at 13.5x his 2016 earnings per share estimates, down from 18.5x at the beginning of 2015. As such, stocks within his coverage are attractive, especially following the group's 25 percent average pullback.

    Meanwhile, Hoexter's proprietary bi-weekly Truck Shipper Survey Diffusion Index is showing signs of improvements. The index reflects "shippers view of demand over the next zero to three months" and has recently began building a positive base sentiment after declining sequentially in eight of the past 12 surveys, a period matched by the seven of eight sequential downticks in 2012.

    Rating And Estimate Changes

    • Shares of Canadian National Railway (USA) (NYSE: CNI) were upgraded to Buy from Neutral with a price target lowered to $64 from a previous $68.
    • Shares of Norfolk Southern Corp. (NYSE: NSC) were upgraded to Buy from Neutral with an unchanged $90 price target.
    • Shares of J B Hunt Transport Services Inc (NASDAQ: JBHT) were upgraded to Buy from Neutral with an unchanged $90 price target.
    • Shares of Knight Transportation (NYSE: KNX) were upgraded to Buy from Neutral with a price target raised to $31 from a previous $30.

    Image Credit: Public Domain

    Latest Ratings for CNI

    DateFirmActionFromTo
    Apr 2019DesjardinsDowngradesBuyHold
    Apr 2019CitigroupMaintainsBuyBuy
    Jan 2019Credit SuisseUpgradesNeutralOutperform

    View More Analyst Ratings for CNI
    View the Latest Analyst Ratings

    Posted-In: Bank of America Ken Hoexter rail stocks RailroadsAnalyst Color Travel Analyst Ratings General Best of Benzinga

     

    Related Articles (JBHT + CNI)

    View Comments and Join the Discussion!

    Latest Ratings

    StockFirmActionPT
    PEPMorgan StanleyReiterates137.0
    AZRXH.C. WainwrightMaintains7.0
    PEPMacquarieMaintains138.0
    POLBuckinghamMaintains36.0
    BKBuckinghamMaintains53.0
    View the Latest Analytics Ratings
    Don't Miss Any Updates!
    News Directly in Your Inbox
    Subscribe to:
    Benzinga Trading Daily
    Get pre-market outlook, mid-day update and after-market roundup emails in your inbox.
    Market in 5 Minutes
    Everything you need to know about the market - quick & easy.
    Daily Analyst Rating
    A summary of each day’s top rating changes from sell-side analysts on the street.
    Thank You
    for registering for Benzinga’s newsletters and alerts.
    • The Daily Analysts Ratings email will be received daily between 7am and 10am.
    • The Market in 5 Minutes email will be received daily between 7am and 8am.
    • The Fintech Focus email will be received every Friday between 2pm and 5pm.

    Seasonal Strategy: Sell Rosh Hashanah And Buy Yom Kippur

    U.S. Grocers Battening Down The Hatches As German Retailers Roll In