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4 Trucking Stocks Poised to Continue Their Winning Streak in 2022
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After struggling for most of 2020 due to coronavirus-induced challenges, the trucking industry rebounded strongly in 2021 as freight demand strengthened with economic activities gaining momentum. Industry experts expect this robust demand environment to continue into the next year, backed by solid U.S. economic growth. While the Omicron-induced woes do have the potential to slowdown U.S. economic growth and consequently weigh on trucking volumes, the impact is anticipated to be limited.
Against this buoyant backdrop, trucking companies like ArcBest Corporation (ARCB - Free Report) , Saia (SAIA - Free Report) , J.B. Hunt Transport Services (JBHT - Free Report) and Forward Air Corporation (FWRD - Free Report) are noteworthy. These stocks reaped significant benefits from a strong business environment in 2021 and are expected to continue thriving in 2022.
ATA Truck Tonnage Index Increases for the 4th Straight Month in November
American Trucking Associations’ (ATA) truck tonnage data shows steady improvement in truck freight volumes. ATA’s advanced seasonally adjusted (SA) For-Hire Truck Tonnage Index increased 1.3% sequentially in November, driven by higher factory output and housing starts. The same had risen 0.4% in October. Per ATA chief economist Bob Costello, “November’s gain was the fourth straight, totaling 4.3%, and the tonnage level was the highest since April.” Compared with the year-ago period, the SA index rose 2.5% in November — marking the largest year-over-year gain since May. In October, the index inched up 1.8% year over year. Truck tonnage increased 0.3% in the year-to-date period compared with the 2020-level. Trucking volumes are expected to continue rising in 2022 as consumer spending remains strong despite high inflation and persistent coronavirus-related uncertainty.
Trucking Rates Expected to Remain Elevated in 2022
Strong freight demand and capacity constraints have been driving trucking rates, thus boosting the top line of trucking companies. As driver shortages continue to limit trucking capacity, freight rates are expected to stay high in 2022. According to a Heavy Duty Trucking article, transportation analysis firm FTR expects spot market rates to remain strong in 2022 despite decreasing from the estimated 2021 level. FTR’s vice president of transportation, Avery Vise, said, “By the end of next year, spot rates should still be running higher than they were even at the peak of the market in 2018.” For contract rates in 2022, FTR is projecting a 4% increase from the current year.
A survey conducted by Bloomberg and Truckstop.com also reflects a healthy outlook for trucking rates in 2022. Lee Klaskow, senior freight transportation and logistics analyst at Bloomberg Intelligence said, "The survey data shows what has likely become the tightest trucking market in a generation and looks poised to keep supporting spot rates into 2022." 55% of the truck drivers under the survey expect spot rates (excluding fuel surcharges) to rise in the first half of 2022. Based on expectations of a persistent tightness in the trucking industry, 74% of those surveyed anticipate rates to either rise or stay steady in 2022.
4 Top Trucking Stocks for 2022
Given the encouraging prospects for trucking companies in 2022, the below-mentioned stocks represent good investment options. Apart from carrying a Zacks Rank #1 (Strong Buy) or 2 (Buy), these stocks have a market capitalization of more than $1 billion. Stocks with large market capitalizations are considered safe as they can withstand economic downturns better. You can see the complete list of today’s Zacks #1 Rank stocks here.
ArcBest: Based in Fort Smith, AK, the company provides freight transportation services and solutions. Strong shipper demand and robust pricing have been driving growth. This has resulted in its shares rallying more than 100% in the year-to-date period. ARCB’s robust performance is expected to continue as freight demand remains strong.
ArcBest’s November 2021 acquisition of Chicago, IL-based truckload broker, MoLo Solutions, is expected to bolster its growth by boosting earnings and revenues. The buyout will help ARCB serve larger customers, secure new customers in a better way and gain a strong foothold in the logistics innovation hub of Chicago. The company sports a Zacks Rank #1.
The Zacks Consensus Estimate for ArcBest’s 2022 earnings has been revised upward by 41.9% in the past 90 days. The company has a market capitalization of $3.08 billion.
Saia: Based in Johns Creek, GA, the company is a leading transportation provider that offers multi-regional less-than-truckload, non-asset truckload, expedited and logistics services. An increase in revenue per shipment and tonnage due to strong shipper demand and improved pricing is driving SAIA’s top line. The company’s focus on pricing initiatives, cost control measures and improving operating efficiency has been supporting its bottom-line. Due to these tailwinds, shares of the company have rallied 85.5% in the year-to-date period.
Saia’s expansion initiatives are expected to contribute to its growth in 2022. Having expanded its presence in the Northeast, the Mid-Atlantic and the Midwest of the United States with new facilities in Connecticut, Delaware, Maryland, Ohio, Virginia and Georgia this year, the company plans to open 10 to 15 new terminals in 2022. The stock flaunts a Zacks Rank #1.
The Zacks Consensus Estimate for Saia’s 2022 earnings has been revised upward by nearly 21.8% in the past 90 days. The company has a market capitalization of $8.7 billion.
J.B. Hunt: Based in Lowell, AR, this company provides a broad range of transportation services to a diverse group of customers through the United States, Canada and Mexico. Fleet productivity improvement, favorable customer freight mix, higher contractual and spot rates, and an increase in load count in the Truck segment, have been aiding JBHT. Strength in the company’s final mile network owing to a spurt in online shopping has been acting as a major growth catalyst. Due to these tailwinds, shares of the company have gained 51.4% in the year-to-date period.
With market conditions expected to remain favorable as the economy continues to recover, J.B. Hunt is anticipated to continue to reap benefits. The company carries a Zacks Rank #2.
The Zacks Consensus Estimate for J.B. Hunt’s 2022 earnings has been revised upward by 5.2% in the past 90 days. The company has a market capitalization of $21.4 billion.
Forward Air: Based in Greeneville, TN, the company provides ground transportation and related logistics services to the North American air freight and expedited LTL market. Strong trucking volumes have been fueling growth of FWRD. This is evident from the company’s share price appreciation of 58.7% in the year-to-date period.
Forward Air’s acquisition of BarOle Trucking and TKI Intermodal expand its intermodal capabilities, while widening its footprint in the Minneapolis–Saint Paul, MN area. The buyouts are expected to boost FWRD’s revenues by $25 million and expand its driver fleet significantly. The company carries a Zacks Rank #2.
The Zacks Consensus Estimate for Forward Air’s 2022 earnings has been revised upward by 9.9% in the past 90 days. The company has a market capitalization of $3.2 billion.
Year-to-Date Price Performance
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4 Trucking Stocks Poised to Continue Their Winning Streak in 2022
After struggling for most of 2020 due to coronavirus-induced challenges, the trucking industry rebounded strongly in 2021 as freight demand strengthened with economic activities gaining momentum. Industry experts expect this robust demand environment to continue into the next year, backed by solid U.S. economic growth. While the Omicron-induced woes do have the potential to slowdown U.S. economic growth and consequently weigh on trucking volumes, the impact is anticipated to be limited.
Against this buoyant backdrop, trucking companies like ArcBest Corporation (ARCB - Free Report) , Saia (SAIA - Free Report) , J.B. Hunt Transport Services (JBHT - Free Report) and Forward Air Corporation (FWRD - Free Report) are noteworthy. These stocks reaped significant benefits from a strong business environment in 2021 and are expected to continue thriving in 2022.
ATA Truck Tonnage Index Increases for the 4th Straight Month in November
American Trucking Associations’ (ATA) truck tonnage data shows steady improvement in truck freight volumes. ATA’s advanced seasonally adjusted (SA) For-Hire Truck Tonnage Index increased 1.3% sequentially in November, driven by higher factory output and housing starts. The same had risen 0.4% in October. Per ATA chief economist Bob Costello, “November’s gain was the fourth straight, totaling 4.3%, and the tonnage level was the highest since April.” Compared with the year-ago period, the SA index rose 2.5% in November — marking the largest year-over-year gain since May. In October, the index inched up 1.8% year over year. Truck tonnage increased 0.3% in the year-to-date period compared with the 2020-level. Trucking volumes are expected to continue rising in 2022 as consumer spending remains strong despite high inflation and persistent coronavirus-related uncertainty.
Trucking Rates Expected to Remain Elevated in 2022
Strong freight demand and capacity constraints have been driving trucking rates, thus boosting the top line of trucking companies. As driver shortages continue to limit trucking capacity, freight rates are expected to stay high in 2022. According to a Heavy Duty Trucking article, transportation analysis firm FTR expects spot market rates to remain strong in 2022 despite decreasing from the estimated 2021 level. FTR’s vice president of transportation, Avery Vise, said, “By the end of next year, spot rates should still be running higher than they were even at the peak of the market in 2018.” For contract rates in 2022, FTR is projecting a 4% increase from the current year.
A survey conducted by Bloomberg and Truckstop.com also reflects a healthy outlook for trucking rates in 2022. Lee Klaskow, senior freight transportation and logistics analyst at Bloomberg Intelligence said, "The survey data shows what has likely become the tightest trucking market in a generation and looks poised to keep supporting spot rates into 2022." 55% of the truck drivers under the survey expect spot rates (excluding fuel surcharges) to rise in the first half of 2022. Based on expectations of a persistent tightness in the trucking industry, 74% of those surveyed anticipate rates to either rise or stay steady in 2022.
4 Top Trucking Stocks for 2022
Given the encouraging prospects for trucking companies in 2022, the below-mentioned stocks represent good investment options. Apart from carrying a Zacks Rank #1 (Strong Buy) or 2 (Buy), these stocks have a market capitalization of more than $1 billion. Stocks with large market capitalizations are considered safe as they can withstand economic downturns better. You can see the complete list of today’s Zacks #1 Rank stocks here.
ArcBest: Based in Fort Smith, AK, the company provides freight transportation services and solutions. Strong shipper demand and robust pricing have been driving growth. This has resulted in its shares rallying more than 100% in the year-to-date period. ARCB’s robust performance is expected to continue as freight demand remains strong.
ArcBest’s November 2021 acquisition of Chicago, IL-based truckload broker, MoLo Solutions, is expected to bolster its growth by boosting earnings and revenues. The buyout will help ARCB serve larger customers, secure new customers in a better way and gain a strong foothold in the logistics innovation hub of Chicago. The company sports a Zacks Rank #1.
The Zacks Consensus Estimate for ArcBest’s 2022 earnings has been revised upward by 41.9% in the past 90 days. The company has a market capitalization of $3.08 billion.
Saia: Based in Johns Creek, GA, the company is a leading transportation provider that offers multi-regional less-than-truckload, non-asset truckload, expedited and logistics services. An increase in revenue per shipment and tonnage due to strong shipper demand and improved pricing is driving SAIA’s top line. The company’s focus on pricing initiatives, cost control measures and improving operating efficiency has been supporting its bottom-line. Due to these tailwinds, shares of the company have rallied 85.5% in the year-to-date period.
Saia’s expansion initiatives are expected to contribute to its growth in 2022. Having expanded its presence in the Northeast, the Mid-Atlantic and the Midwest of the United States with new facilities in Connecticut, Delaware, Maryland, Ohio, Virginia and Georgia this year, the company plans to open 10 to 15 new terminals in 2022. The stock flaunts a Zacks Rank #1.
The Zacks Consensus Estimate for Saia’s 2022 earnings has been revised upward by nearly 21.8% in the past 90 days. The company has a market capitalization of $8.7 billion.
J.B. Hunt: Based in Lowell, AR, this company provides a broad range of transportation services to a diverse group of customers through the United States, Canada and Mexico. Fleet productivity improvement, favorable customer freight mix, higher contractual and spot rates, and an increase in load count in the Truck segment, have been aiding JBHT. Strength in the company’s final mile network owing to a spurt in online shopping has been acting as a major growth catalyst. Due to these tailwinds, shares of the company have gained 51.4% in the year-to-date period.
With market conditions expected to remain favorable as the economy continues to recover, J.B. Hunt is anticipated to continue to reap benefits. The company carries a Zacks Rank #2.
The Zacks Consensus Estimate for J.B. Hunt’s 2022 earnings has been revised upward by 5.2% in the past 90 days. The company has a market capitalization of $21.4 billion.
Forward Air: Based in Greeneville, TN, the company provides ground transportation and related logistics services to the North American air freight and expedited LTL market. Strong trucking volumes have been fueling growth of FWRD. This is evident from the company’s share price appreciation of 58.7% in the year-to-date period.
Forward Air’s acquisition of BarOle Trucking and TKI Intermodal expand its intermodal capabilities, while widening its footprint in the Minneapolis–Saint Paul, MN area. The buyouts are expected to boost FWRD’s revenues by $25 million and expand its driver fleet significantly. The company carries a Zacks Rank #2.
The Zacks Consensus Estimate for Forward Air’s 2022 earnings has been revised upward by 9.9% in the past 90 days. The company has a market capitalization of $3.2 billion.
Year-to-Date Price Performance