UBS upgraded Knight-Swift Transportation to Buy from Neutral, citing improving visibility on a reduction in truckload capacity and rising freight rates that could lift earnings.
The brokerage said attrition among truck drivers has accelerated, pointing to monthly declines in commercial driver licenses that have increased since late 2025. This, alongside higher spot freight rates, signals a tightening supply-demand balance in the truckload market.
"We believe supply attrition is enough to support a ~5% y/y increase in KNX's revenue per loaded mile ex. fuel in 2026,” analysts at UBS said.
With analysts now expects a 5 percentage point reduction in industry capacity in 2026, contributing to a broader 6-point improvement in supply-demand conditions. It said spot truckload rates are already up about 15% year-on-year in early 2026 and could rise around 16% for the full year.
Stronger pricing is the key driver for Knight-Swift’s earnings, UBS said. It raised its forecast for truckload pricing gains to about 15 percentage points over 2026–2027, up from 12 points previously.
The bank lifted its 2027 earnings estimate to $3.65 per share from $3.40, reflecting higher pricing and margin expansion in the truckload segment. It expects margin improvement of about 460 basis points over the period.
Near-term, UBS flagged headwinds from higher fuel costs and weather, cutting its first-quarter 2026 earnings estimate to $0.27 per share from $0.30.
source https://www.investing.com/news/stock-market-news/ubs-upgrades-knightswift-on-tightening-truck-supply-higher-freight-rates-4568977
