Wolfe Research updated the firm’s EPS estimates across its transport coverage ahead of Q3 earnings while raising the firm’s rating on Saia (SAIA) to Outperform from Peer Perform, downgrading ArcBest (ARCB) to Peer Perform from Outperform, and Expeditors (EXPD) to Underperform from Peer Perform. West Coast import volumes surged in Q3, leading to the best growth in rail intermodal volumes in the past 13 quarters, but truckload spot rates and less-than-truckload tonnage for most carriers remained muted, and Wolfe continues to see a “mixed bag” across freight with no signs of a broad recovery, the analyst tells investors in a research note. While the East Coast port strike and back-to-back major hurricanes in the Southeast could potentially lead to tighter capacity conditions, based on current trends, Wolfe continues to see significant EPS risk for many of the companies in its looking out to 2025, with double digit downside for ArcBest, Forward Air (FWRD), Paccar (PCAR), Landstar System (LSTR), and Hub Group (HUBG). After transports have materially underperformed year-to-date, the firm believes risk/reward is getting more attractive again on a company-specific and sub-sector basis.

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Read More on SAIA:

• Wolfe Research sees ‘mixed bag’ across freight, no signs of broad recovery

• Saia upgraded to Outperform from Peer Perform at Wolfe Research

• Saia initiated with a Buy at Citi

• Saia price target lowered to $488 from $503 at Evercore ISI

• Saia price target raised to $481 from $465 at Stephens