Morgan Stanley downgraded its view on the North American freight transportation sector to In-Line from Attractive, arguing that much of the cyclical recovery upside is already reflected in stock prices at record valuations. The brokerage raised earnings estimates and price targets for most companies under coverage, citing tightening trucking capacity, improving pricing, and recovering demand, but warned that the debate has shifted to how high earnings can climb and whether gains are sustainable. Key freight indicators have reached record levels, yet demand remains less certain than supply, and the firm believes the industry is only in the early stages of a demand recovery. Transportation stocks have climbed roughly 50% since late 2025, pushing valuations to all-time highs and reducing the margin for further gains. Morgan Stanley downgraded Old Dominion Freight Line to Equal-weight from Overweight, J.B. Hunt Transport Services to Underweight from Equal-weight, and Landstar System to Underweight, while continuing to favor truckload carriers, selected less-than-truckload operators, and Canadian railroads.
JB Hunt Transport Services IncDowngraded to Underweight from Equal-weight by Morgan Stanley
Landstar System IncDowngraded to Underweight by Morgan Stanley
Old Dominion Freight Line IncDowngraded to Equal-weight from Overweight by Morgan Stanley
Morgan Stanley