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Morgan Stanley Releases Freight Transportation Review

Friday January 29, 2010

William Greene and Adam Longson with Morgan Stanley released a review of the 4th Quarter of 2009 and has shared this with us. While looking primarily at stock prices, we thought you might find this interesting.

Updating Estimates: Holiday strength suggests utilization surprises, but pricing slow to follow. We updated our TL and UPS EPS for the latest fuel prices and industry trends. In general, we expect 4Q09 TL results to outpace consensus with JBHT, WERN, and KNX as the most likely beats. Given strong holiday demand trends and atypical strength in our TL freight index, we've raised our expectations for TL utilization and expect miles/truck to increase year to year for most carriers. That said, TL pricing did not appear to benefit nearly as much in the quarter. Year to year pricing declines should improve from 3rd Quarter 2009 lows on easy comps, but positive year to year pricing trends may not materialize until mid-2010

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