Why Shares in Knight-Swift Transportation Crashed This Week
A Wall Street analyst recently downgraded the stock on valuation concerns.
Why Shares in Knight-Swift Transportation Crashed This Week
Overview
Knight-Swift Transportation (NYSE: KNX) is the largest full truckload carrier in the U.S., and it's always going to be at the center of the never-ending debate over where trucking companies are in the cycle. This week, the bears are winning the debate, with the stock declining by 11.4% through Friday morning, partly driven by a Citi analyst downgrading the stock to neutral from buy, even as the price target was raised to $90 from $72.
Demand and pricing power in the trucking industry tend to be highly cyclical, with alternating periods of boom and bust. As ever, this leads investors to try to anticipate when inflection points will occur. The recent Citi downgrade reflects the idea that there's already "elevated optimism" in the stock, as the market has priced in a more positive trucking environment in 2026.
Details
Probably the best dataset to follow on trucking comes from Cass Information Systems, specifically its for-hire freight shipment data across North America. The Cass Freight Index (Shipments) has declined year over year every month since the start of 2023, but has been in positive territory month over month since February of this year. As such, the market is pricing in a return to year-over-year growth.
Source
Originally published at www.fool.com.
