3 Truck Stocks Worth Keeping An Eye On Despite Industry Pressure

Core Viewpoint - The Zacks Transportation-Truck industry is currently facing significant challenges, including weak freight rates, driver shortages, inflation, and ongoing supply-chain disruptions, which are impacting its overall performance and outlook [1][4][6]. Industry Overview - The Zacks Transportation-Truck industry consists of truck operators that transport freight across North America, offering various services such as full-truckload and less-than-truckload (LTL) [3]. - Companies in this industry also provide logistics, intermodal services, and value-added services like supply-chain consulting and warehousing [3]. Current Trends - Supply-chain disruptions and weak freight rates are negatively affecting the industry, with the Cass Freight Shipments Index declining by 8.2% year over year in January, indicating a consistent downward trend throughout 2024 [4]. - The industry is experiencing a prolonged truck-driver shortage, with an expected shortfall of over 160,000 drivers by 2030, exacerbating supply-chain challenges [6]. Financial Performance - Companies in the industry are returning value to shareholders through dividends and buybacks, reflecting their financial strength. For instance, Old Dominion Freight Line (ODFL) announced an increase in its quarterly dividend [5]. - The Zacks Transportation-Truck industry has underperformed the S&P 500, declining by 31.7% over the past year compared to the S&P 500's increase of 19.7% [11]. Valuation Metrics - The industry is currently trading at an EV-to-EBITDA ratio of 17.1X, slightly below the S&P 500's 17.52X but above the sector's 11.11X [13]. Company Highlights - Forward Air Corporation (FWRD): This asset-light freight and logistics company is focused on growth through acquisitions, recently acquiring Edgmon Trucking. The Zacks Consensus Estimate for its 2025 earnings has been revised upward by 8.3% [15]. - ArcBest Corporation (ARCB): The company is improving productivity and service quality, expecting a 11.5% increase in its 2025 earnings per share compared to 2024 [18]. - Old Dominion Freight Line (ODFL): Known for its shareholder-friendly measures, ODFL anticipates a 3.7% increase in its 2025 earnings per share from 2024 [20].