Reefer Truck Rental, Stifel bullish, Morgan Stanley bearish on trucking-The investment company Stifel Nicolaus (NYSE: SF), which is traded on shares, is now an attractive purchase and higher profits are available at affordable prices. This is all research that Stifel and Morgan Stanley (NYSE: MS) reported this week, because banks are looking forward to what the next year offers transport.
David Stifel Ross is expected to increase contract from 5-7 percent in 2019, while Ravi Shankar Morgan Stanley wrote in a November 28th note: “We expect our 2018 orientation to be below 2,017 in 2014 and in line with the average level of the LT for the same year, the rest of the year, 2019 with a trend lower than 2018. ”
Overall, the data from Morgan Stanley shows that delivery trucks (capacity) demand (load) is growing faster, a dynamic that, if Shanker put pressure on interest rates, while Ross believes that additional capacity in 2018 is necessary to compensate for the loss of productivity. ELD mandate. Ultimately, we want more visibility in productivity and use of hours of work when estimating capacity; Domestic supply trends are becoming less important because small and medium-sized fleets are turning to regional networks to increase the density of the route and enable drivers to return to their homes more often.
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It should be noted that although the analysis provides a high BPA Stifel for transportation companies in the next two years, Ross was aware that rising interest rates tend to slow the ratio of price / earnings. In a note published yesterday, Stifel lowered the indicative price for most trucks and 3PL actions that it covers.
“We have made changes (usually less, sometimes large) in our estimate more targets, which are significantly lower in the current cycle and the likelihood of continued more austerity reflections, as interest rates rise,” wrote Ross on November 29th. Estimates EPS remained virtually unchanged, because we expect modest economic growth in 2019 and, depending on the sector, further increase in margins by price force. ”
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Some employees unharmed: Schneider National (NYSE: SNDR) held the target price of $ 28 more than 15.5 times the estimated 2019 EPS, Knight-Swift (NYSE: KNX) in 43 USD multiple of 17x and Heartland Express (NASDAQ: HTLD) stayed at $ 19, more than 20 times. Specifically, Stifel updates Ryder (NYSE: R), based on market hardening equipment at the end of its useful life, which should be bearish for the rental sector.
“Ryder benefits from narrow trend of trucks and commercial outsourcing because the cost of equipment has increased significantly, and trucks for the engine become increasingly complex,” said Ross.
Morgan Stanley’s cargo survey suggests that the sector might be more cautious than Stifel’s single-layer and medium-high contracts. Only 36% of respondents said they expected higher rates in the next three months, while 48% said prices would remain unchanged.
Data on the loading speed and DAT load contracts stated Morgan Stanley revealed that the three main types of equipment: dry van, platform and cools the contract only cooling speed are always available from their tops. Morgan Stanley says that the prices of the dry vans have already reached their peak, and prices on the spot market have dropped by about 10% from $ 2 / mile to $ 1.80 / mile. The package also declined again, namely from about $ 2.40 per mile for about $ 2 per kilometer, it should be noted that these prices are in line with the peak in 2017.
With regard to the transport sector’s performance in 2019, three issues are closely linked: the macroeconomic environment, the profitability of transport companies in this environment and the appetite of investors for such exposure to this risk. Our opinion voiced FreightWaves chief economist, Ibrahiim Bayaan at a seminar earlier this week that economic growth in 2019 will be reduced to the “average” level of around 2.5% and capacity constraints associated drivers are structured ….
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