WERN - BofA bullish on trucking as cyclical recovery hits higher gear

Bank of America turns positive on the trucking sector again after sitting on the sidelines through the winter. Truck stocks are called well positioned for a strong 2021 cyclical recovery "While our November Truck downgrade was driven by rapidly rising capacity concerns, we believe these have been somewhat built into outlooks, and allayed due to an accelerating driver shortage, and fleet ages continuing to decline. We believe truckload carriers are positioned to benefit from the cyclical forces of tight capacity & improving economic conditions, which lifted multiples of their more richly valued transport peers, the Rails to low-20s and LTLs to 30x+ forward earnings. The truckload discount reflects concerns related to (1) over-ordering of trucks flooding the market with excess supply, and (2) lack of compound earnings growth at truckload carriers. While cognizant that rising Class 8 Net Truck orders presents a potential overhang in 2H21, we expect strength in

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BofA bullish on trucking as cyclical recovery hits higher gear