Wolfe Research analyst Scott Group is more positive on Transport stocks after his Q4 shipper survey results indicated that full truckload pricing expectations are bottoming and that over-capacity has peaked. The sector has underperformed the S&P 500 for two straight years, and has not underperformed for three straight years since the late 1990s, Group tells investors in a research note. The analyst Class 8 truck production will inflect below replacement levels by Q2 and he now prefers full truckload over less than truckload stocks. As such, Group upgraded both Knight-Swift Transportation (KNX) and Covenant Transportation (CVTI) to Outperform from Peer Perform. The analyst also upgraded C.H. Robinson Worldwide to Outperform from Peer Perform on the belief that the company's net revenue will bottom in Q1 of 2020.

Reports Q1 revenue $1.82B, consensus $1.82B. CEO Adam Miller commented, "The full truckload market remains extremely challenging as carriers navigate the oversupply of capacity, reduced load volumes, and continued rate pressure through the early part of the bid season. This has negatively impacted the results of our Truckload, Logistics, and Intermodal segments...Although our consolidated results are not where we would like them to be, we are confident that we have the resources and are capable of the disciplined approach necessary to navigate the current market...We are continuing our strategy of building a nationwide LTL network through both organic and inorganic growth paths. Our logistics segment will continue to complement our truckload brands, leverage our power-only capabilities, preserve profitability, and afford outsized growth opportunity when the truckload market strengthens. We are building a strong foundation of diverse customers in our intermodal business with strategic rail partners, which we believe will position us for sustained profitability in the future."