2 Truck Stocks That Continue to Be in Focus Despite Industry Challenges

Core Viewpoint - The Zacks Transportation-Truck industry is facing significant challenges due to tariff-induced economic uncertainties, weak freight rates, driver shortages, and inflation, yet some companies like Marten Transport and PAMT CORP are positioned to endure these difficulties [1]. Industry Overview - The Zacks Transportation-Truck industry consists of truck operators that transport freight across North America, offering various services including full-truckload and less-than-truckload (LTL) [2]. - Companies in this sector provide diverse trucking services such as dry-van, dedicated, refrigerated, flatbed, and expedited, along with logistics and intermodal services [2]. Current Trends - Supply-chain disruptions and weak freight rates are negatively impacting the industry, with the Cass Freight Shipments Index declining by 5.3% year-over-year in March, marking eight consecutive months of decline [3]. - The industry is focusing on cost-cutting measures to improve productivity and efficiency in response to high inflation affecting labor, freight, and fuel costs [4]. - A prolonged driver shortage is expected to leave the trucking industry short of over 160,000 drivers by 2030, exacerbating supply-chain challenges [5]. Tariff Impact - The current administration's protectionist policies and new tariffs are creating trade tensions with major partners like Canada, Mexico, and China, leading to increased volatility and uncertainty in global trade, which is detrimental to the industry [6]. Industry Ranking and Performance - The Zacks Transportation-Truck industry ranks 244 out of 246 Zacks industries, placing it in the bottom 1% and indicating poor near-term prospects [7]. - Analysts have reduced the industry's earnings estimate for 2025 by 42.7% year-over-year, reflecting a negative outlook for earnings growth [8]. - Over the past year, the industry has underperformed, declining by 30.6%, while the S&P 500 increased by 8.3% and the broader transportation sector fell by 17.4% [10]. Valuation Metrics - The industry is currently trading at an EV-to-EBITDA ratio of 13.64X, which is lower than the S&P 500's 15.2X but higher than the sector's 8.82X [13]. Notable Companies - Marten Transport, based in Mondovi, WI, operates across five business platforms and has shown impressive cost-control efforts, currently holding a Zacks Rank 3 (Hold) [17]. - PAMT CORP provides truckload dry van carrier services and has expanded its customer base significantly through acquisitions, also holding a Zacks Rank 3 [21].