Investors await the next leg of Class I rail earnings growth as the PSR story moves toward the rear-view mirror. This report explores the factors at play that can drive the future
We attended the NEARS (Northeast Association of Rail Shippers) City Series event in New York City and hosted a call with a Farrukh Bezar, Chair of STG Logistics. Following are our takeaways.
We adjust our models ahead of a first quarter that came with severe weather, pull forward, and growing macro uncertainties that could limit upside over the near term. We broadly lower estimates
Rate hike expectations fell 20bps sequentially, trending below the survey’s LT average. Business growth fell sharply to levels not seen since COVID. Economic confidence fell back to pre-election levels as optimism fades. 44% of shippers pulled freight forward ahead of tariffs as uncertainties grow. We are cautious on the rail group ahead of earnings, and favor Union Pacific (UP) for U.S. rail exposure.
Equipment industry panelists expect muted 2025 railcar demand amid elevated interest rates and trade uncertainty affecting carloads as well as input prices. Disruptions are likely to benefit secondary market valuations. Labor and
Rate hike expectations +30bps sequentially, though still below survey average. Biz growth & confidence stepped up significantly in first survey post-election. 26% of shippers have pulled freight in anticipation of tariffs, and
The President-elect has expressed his intent to nominate David Armstrong Fink, former President of Pan Am Railways and the son of David Andrew Fink, who served as President of Guilford Transportation before it rebranded as Pan Am, to lead the Federal Railroad Administration (FRA), according to multiple news reports.
We hosted a call with Farrukh Bezar, Chairman of the Board at STG Logistics, the fourth-largest asset-based intermodal marketing company (IMC), on the state of the rail network, intermodal into 2025, and
At the latest “Railroad Happy Hour” event at TD Cowen, leaders in the railroad market pointed to noteworthy signs of optimism looking into next year as industrial projects take stronger footing. Intermodal rates
CSX delivered “meaningful growth in volume, operating income, and operating margin in the third quarter,” President and CEO Joe Hinrichs said of his Class I railroad, the first to report financial results for the three months ending Sept. 30, 2024.
