Transportation and Logistics Stocks Q3 Recap: Benchmarking Union Pacific (NYSE:UNP)

November 27, 2024 at 03:14 AM EST

UNP Cover Image

Earnings results often indicate what direction a company will take in the months ahead. With Q3 behind us, let’s have a look at Union Pacific (NYSE: UNP) and its peers.

The growth of e-commerce and global trade continues to drive demand for shipping services, presenting opportunities for transportation and logistics companies. The industry continues to invest in advanced technologies such as automated sorting systems and real-time tracking solutions to enhance operational efficiency. Companies that win in this space boast speed, reach, reliability, and last-mile efficiency while those who do not see their market shares diminish. Like other industrials companies, transportation and logistics companies are at the whim of economic cycles. Consumer spending, for example, can greatly impact the demand for these companies’ offerings while fuel costs influence profit margins.

The 31 transportation and logistics stocks we track reported a slower Q3. As a group, revenues missed analysts’ consensus estimates by 0.8% while next quarter’s revenue guidance was 15.4% below.

Thankfully, share prices of the companies have been resilient as they are up 8.7% on average since the latest earnings results.

Union Pacific (NYSE: UNP)

Part of the transcontinental railroad project, Union Pacific (NYSE: UNP) is a freight transportation company that operates a major railroad network.

Union Pacific reported revenues of $6.09 billion, up 2.5% year on year. This print fell short of analysts’ expectations by 0.8%. Overall, it was a slower quarter for the company with a miss of analysts’ EBITDA estimates.

Interestingly, the stock is up 1.9% since reporting and currently trades at $245.84.

Read our full report on Union Pacific here, it’s free.

Best Q3: Expeditors (NYSE: EXPD)

Founded in Seattle, Washington, Expeditors International (NYSE: EXPD) specializes in global logistics, offering transportation, supply chain, and distribution services.

Expeditors reported revenues of $3 billion, up 37% year on year, outperforming analysts’ expectations by 21.3%. The business had an incredible quarter with a solid beat of analysts’ EBITDA estimates.

Expeditors pulled off the biggest analyst estimates beat among its peers. The market seems content with the results as the stock is up 1.4% since reporting. It currently trades at $121.99.

Is now the time to buy Expeditors? Access our full analysis of the earnings results here, it’s free.

Weakest Q3: Scorpio Tankers (NYSE: STNG)

Operating one of the youngest fleets in the industry, Scorpio Tankers (NYSE: STNG) is an international provider of marine transportation services, specializing in the shipment of refined petroleum.

Scorpio Tankers reported revenues of $258.2 million, down 10.7% year on year, falling short of analysts’ expectations by 8.7%. It was a disappointing quarter as it posted a significant miss of analysts’ adjusted operating income estimates.

Scorpio Tankers delivered the weakest performance against analyst estimates in the group. As expected, the stock is down 16% since the results and currently trades at $51.21.

Read our full analysis of Scorpio Tankers’s results here.

Universal Logistics (NASDAQ: ULH)

Founded in 1932, Universal Logistics (NASDAQ: ULH) is a provider of customized transportation and logistics solutions operating throughout the United States and in Mexico, Canada, and Colombia.

Universal Logistics reported revenues of $426.8 million, up 1.3% year on year. This number came in 8% below analysts' expectations. All in all, it was a slower quarter for the company.

The stock is up 17.8% since reporting and currently trades at $51.17.

Read our full, actionable report on Universal Logistics here, it’s free.

Air Transport Services (NASDAQ: ATSG)

Founded in 1980, Air Transport Services Group (NASDAQ: ATSG) provides air cargo transportation and logistics solutions.

Air Transport Services reported revenues of $471.3 million, down 9.9% year on year. This result lagged analysts' expectations by 7.1%. It was a disappointing quarter as it also logged a significant miss of analysts’ adjusted operating income and EPS estimates.

The stock is flat since reporting and currently trades at $21.95.

Read our full, actionable report on Air Transport Services here, it’s free.

Market Update

Thanks to the Fed's series of rate hikes in 2022 and 2023, inflation has cooled significantly from its post-pandemic highs, drawing closer to the 2% goal. This disinflation has occurred without severely impacting economic growth, suggesting the success of a soft landing. The stock market has thrived in 2024, spurred by recent rate cuts (0.5% in September and 0.25% in November), and a notable surge followed Donald Trump’s presidential election win in November, propelling indices to historic highs. Nonetheless, the outlook for 2025 remains clouded by potential trade policy changes and corporate tax discussions, which could impact business confidence and growth. The path forward holds both optimism and caution as new policies take shape.

Want to invest in winners with rock-solid fundamentals? Check out our Top 5 Quality Compounder Stocks and add them to your watchlist. These companies are poised for growth regardless of the political or macroeconomic climate.

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