WERN - Truckload stocks upgraded to Buy as UBS calls a bottom

Werner Enterprises ( NASDAQ: WERN ), Schneider National ( NYSE: SNDR ), and Heartland Express ( NASDAQ: HTLD ) were upgraded to “Buy” at UBS on Friday as the bank’s analysts believe “we are close to a bottom in rates.”

The bank’s analysts told clients that truckload stocks typically move ahead of the true bottom in spot rates, making the opportunity most appealing ahead of the expected turn into 2023. Across the upgraded names as well as already Buy-rated Knight Swift Transportation ( NYSE: KNX ), the analysts see 20% to 30% upside even after recent upward moves.

“We continue to believe that the 2018-2019 U.S. freight downturn is the most comparable to where we are today, and in comparing the two backdrops, we now believe that we have made the appropriate magnitude of cuts to our 2023 EPS estimates,” the analysts explained. “We also believe that the truckload stocks should begin to outperform, as our analysis indicates such an occurrence for the stocks once forward estimate cuts are approximately halfway toward a trough.”

Shares of Werner Enterprises ( WERN ) +3.77% , Schneider National ( SNDR ) +1.96% , and Heartland Express ( HTLD ) +1.7% each rose on Friday. Knight Swift Transportation ( KNX ) edged slightly lower by contrast.

Read more on the latest acquisition by Werner Enterprises .

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