U.S. equities are continuing to push higher on Tuesday, with the Dow Jones Industrial Average extending its move above the 27,000 level. Better-than-expected results from big bank stocks like JPMorgan (NYSE:JPM) are fueling ongoing buying interest as the latest earnings season rolls on.
This comes despite the ongoing flow of uneven economic data. U.S. industrial production slowed in the second quarter for the first back-to-back decline since 2016. Freight shipments, according to the Cass Index, fell for the seventh straight month. Yet retail sales are strong.
With the Federal Reserve expected to cut interest rates later this month, likely fueling another surge in buying interest, I’ve noticed a number of transportation stocks perking up. This could be an early sign that the market is pricing in an economic rebound, since these companies are on the front lines of the business cycle, moving the people and the goods that make the system work.
Here are five transportation stocks that are worth a look:
Transportation Stocks to Buy: Union Pacific (UNP)
Shares of Union Pacific (NYSE:UNP) are breaking up and out of a multi-month consolidation range to push back towards the highs seen in May. Shares were recently initiated with a buy rating at Goldman Sachs, with a $198 price target translating into a gain of roughly 13% from here.
The company will next report results on July 18 before the bell. Analysts are looking for earnings of $2.14 per share on revenues of $5.6 billion. When the company last reported on April 18, earnings of $1.93 beat estimates by six cents on a 1.7% decline in revenues.
Shares of CSX (NASDAQ:CSX), another railroad, are preparing to exit a four-month consolidation range with a push up and over resistance near the $80-a-share level. Analysts at Goldman Sachs recently initiated coverage with a neutral rating and a $86 price target, but Loop Capital recently downgraded from “buy” to “neutral.”
The company will next report results tonight after the close. Analysts are looking for earnings of $1.11 per share on revenues of $3.1 billion. When the company last reported on April 16, earnings of $1.02 per share beat estimates by 11 cents on a 4.8% rise in revenues.
FedEx (NYSE:FDX) stock is rising up and off of support going back to late December, perking up and over its 50-day moving average. Watch for a run at the 200-day moving average, which would be worth a gain of roughly 8% from here. Analysts at Goldman recently initiated coverage with a “buy” rating and added the stock to its conviction buy list.
The company will next report results on Sept. 17 after the close. Analysts are looking for earnings of $3.18 per share on revenues of $17.1 billion. When the company last reported on June 25, earnings of $5.01 beat estimates by 18 cents on a 2.8% rise in revenues.
UPS (NYSE:UPS) shares have cleared above their 200-day moving average for the first time since April, and are now threatening to break out of a churning, two-year downtrend with a move back towards $118 — which would be worth a gain of more than 11% from here. The stock also had coverage initiated by Goldman analysts this month, with a buy rating and a target of $123 assigned.
The company will next report results on July 24 before the bell. Analysts are looking for earnings of $1.93 per share on revenues of $17.9 billion. When the company last reported on April 25, earnings of $1.39 missed estimates by four cents on a 0.3% rise in revenues.
Delta Airlines (DAL)
Shares of Delta Airlines (NYSE:DAL) are taking flight, going vertical after breaking up and over resistance from its November and April highs. This ends a two-year funk going back to early 2018 as the company — which tops customer satisfaction surveys in a tough industry — continues to execute well. The airline has been able to avoid the disruptions tied to the grounding of the Boeing (NYSE:BA) 737 MAX, since it didn’t operate that model.
The company will next report results on Oct. 10 before the bell. Analysts are looking for earnings of $2.26 per share on revenues of $12.7 billion. When the company last reported on July 11, earnings of $2.35 beat estimates by seven cents on a 6.5% rise in revenues.
As of this writing, William Roth did not hold a position in any of the aforementioned securities.