KNX - Knight-Swift Transportation Navigating Around Potholes In The Trucking Cycle

Summary

• Knight-Swift had a disappointing fourth quarter, as deterioration in the core trucking and logistics markets hit the company even harder than expected.
• Trucking continues to be pressured by overcapacity and weak freight demand, and an expected second-half recovery is tied to improved consumer spending and further retailer destocking.
• Management once again endorsed its $4/share-plus trough earnings target, but the Street is increasingly skeptical.
• I do like the long-term story at Knight-Swift, including diversification/expansion into less-than-truckload, but there are definitely risks to the near-term market outlook.

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