Market Overview

Barclays Sees Brexit Effects Spreading To Transport Stocks

Barclays Sees Brexit Effects Spreading To Transport Stocks

Barclays analyst Brandon Oglenski sees the effects of Brexit percolating to transport stocks. The analyst sees fundamentals changing in the transportation sector in the wake of the Britain's preference to exit the EU.

He likes FedEx Corporation (NYSE: FDX), Canadian Pacific Railway Limited (USA) (NYSE: CP), C.H. Robinson Worldwide, Inc. (NASDAQ: CHRW) and Expeditors International of Washington (NASDAQ: EXPD).

For instance, he pointed out that the USD is trading higher while commodities are weaker. The vote has also created a situation where analysts and investors now expect the interest rate to remain low for the foreseeable future.

Related Link: 4 Reasons The U.S. Is So Sensitive To Global Events Like brexit

Oglenski pointed out that interest rates and higher inflation are normally the factors behind robust freight pricing environments. Also, the commodity prices will be under pressure due to a strong USD; a strong USD would pose material headwinds for railroad demand.

Barclays sees transportation stocks not as overtly expensive, but also not dirt cheap. "We still see plenty of downside potential if economic conditions worsen. As demonstrated by recent negative earnings announcements from Canadian Pacific and Werner, the outlook remains subject to material downward revision as expectations remain linked to economic expansion," the analyst explained.

He added, "With earnings and valuation downside representing about 15–20 percent from current stock levels relative to realistic upside of slightly less, we think investors should stay focused on 'cheap' asset based stocks such as CP and FDX, or continue to own more defensive asset-light names such as CHRW and EXPD."

At Time Of Writing...

  • Expeditors was down 1.07 percent at $46.99.
  • C.H. Robinson was up 0.31 percent at $71.85.
  • Canadian Pacific was down 3.02 percent at $120.80.
  • FedEx was down 3.29 percent at $145.61.

Latest Ratings for CHRW

Jan 2020MaintainsEqual-Weight
Jan 2020DowngradesPositiveNeutral
Jan 2020MaintainsNeutral

View More Analyst Ratings for CHRW
View the Latest Analyst Ratings

Posted-In: Barclays Brandon OglenskiAnalyst Color Long Ideas Travel Analyst Ratings Trading Ideas General


Related Articles (CHRW + CP)

View Comments and Join the Discussion!

Latest Ratings

View the Latest Analytics Ratings
Don't Miss Any Updates!
News Directly in Your Inbox
Subscribe to:
Benzinga Premarket Activity
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.
Fintech Focus
A daily collection of all things fintech, interesting developments and market updates.
Thank You

Thank you for subscribing! If you have any questions feel free to call us at 1-877-440-ZING or email us at