Morgan Stanley turned more constructive on the freight transportation sector as a whole with an upgrade to In-line from Cautious.
"After a 12-15 month de-stocking driven downcycle, we see signs of bottoming that can potentially lead to inventory normalization by mid-2023 and perhaps drive an upcycle in2H23," noted analyst Ravi Shanker.
The firm said it see signs that the 2022 Freight downcycle may be bottoming and a mid-year normalization of inventory levels could potentially flip to an upcycle in the second half of 2023 and 2024.
As for specific stocks, Morgan Stanley upgraded Saia ( NASDAQ: SAIA ) to Equal-weight from Underweight, lifted Landstar System ( LSTR ) to Equal-weight from Underweight, and hiked its rating on GXO Logistics ( GXO ) to Overweight from Equal-weight.
In premarket action, LSTR gained 0.85% and GXO rose 2.18% .
Compare valuation, growth, and profitability metrics on SAIA, LSTR and GXO.
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Freight transportation stocks look more appealing to Morgan Stanley