TFII - Trucking stocks rally again after strong Old Dominion earnings more Yellow drama

2023-07-26 12:56:43 ET

The Russell 3000 Index Trucking Index hit a new all-time high on Wednesday after developments around Yellow Corporation ( YELL ) and strong earnings from Old Dominion Freight Line ( NASDAQ: ODFL ) brought even more buyers into the sector.

Citi analyst Chris Wetherbee noted that ODFL did a better job managing costs while tonnage remained weak. The trucking company narrowly beat revenue and EPS expectations, and announced a $3B stock repurchase program. Wells Fargo's Allison Poliniak-Cusic said the firm continue to view ODFL as a best-in-class operator with a commensurate track record. It was noted that results indicate that ODFL can maintain pricing even when volume is a headwind. "Sequentially trends will be a focus given the increasingly challenged freight environment," updated the analyst.

Meanwhile, the major focus in the sector continues to be on a potential bankruptcy of Yellow ( YELL ) and the implication of less trucking supply. FreightWaves reported that the company sent a memo to employees indicating that it is limiting some pick ups.

"As a result of these unfortunate circumstances and the impact on the network, we are limiting pick-up operations in all terminals. Over the coming days, the Company is focused on delivering existing shipments in the network to its valued customers and communicating with our employees on new developments while we continue working an accelerated process with union discussions."

On Tuesday, Cowen warned Yellow shipments could be down 80% based off its own channel checks.

Tale of the tape: Gainers in the trucking sector on Wednesday included Yellow Corporation ( YELL ) +8.25% , ArcBest Corporation ( ARCB ) +6.09% , Old Dominion Freight Line ( ODFL ) +6.07% , Saia ( SAIA ) +4.90% , TuSimple ( TSP ) +4.85% , Daseke ( DSKE ) +4.51% , XPO ( XPO ) +4.40% , TFI International ( TFII ) +3.25% , and Knight-Swift Transportation ( KNX ) +2.77% . Over the last four weeks, the biggest advancers amid the Yellow developments have been ArcBest ( ARCB ) +37%, XPO ( XPO ) +33%, SAIA ( AIA ) +29%, Old Dominion Freight Line ( ODFL ) +25%, and Covenant Logistics Group ( CVLG ) +16%.

More on Yellow Corporation:

• Yellow Corporation: Knives Out For Potential Bankrupt Trucking Firm
• Trucking stocks rally as potential Yellow bankruptcy is factored in
• Knight-Swift: Running On Hopium, Caution Advised

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