NEW YORK — Jefferies sees a buying opportunity in transport and logistics, arguing that a divergence between rising earnings and falling share prices reflects position unwinding, not weakening fundamentals. Analyst Stephanie Moore made the case in a recent client note.
The sector posted one of its strongest freight quarters in years, with beats and raises across nearly every transport mode. Despite that strength, most stocks outside rail gave back 10 percent to 30 percent from their intra-quarter highs. Jefferies interprets the selloff as a well-owned group unwinding a large prior rally.
Rail carriers, less-than-truckload operators and brokers are all showing accelerating volumes and tightening supply as the third quarter progresses. For rails, volume growth is both accelerating and broadening, with strength in categories including grain, food, metals and chemicals pointing to a wider demand recovery that carried into July and August.
The LTL segment is showing a volume inflection alongside operating leverage. XPO achieved its first-ever operating ratio below 80 percent, a meaningful efficiency and profitability milestone for the less-than-truckload space.
Brokerage firms C.H. Robinson and RXO suffered sharp selloffs despite strong execution. Jefferies said fears around nuclear verdicts and broker liability drove the investor reaction—a response the firm views as disproportionate to actual operational performance.
Logistics provider GXO saw a roughly 10 percent selloff. Jefferies called GXO "misunderstood and undervalued," citing record new business wins as evidence of operational strength not reflected in the share price.
Multiples across the sector have reset to or below long-term averages. With fundamentals firming, Jefferies maintains the pullback is a clear buying opportunity and expects freight momentum to strengthen through the second half of 2026 and into 2027.
Jefferies' top ideas in the sector are XPO, ArcBest, CSX, Canadian National, RXO and GXO.
