It’s not been a great year for transportation stocks.

The benchmark SPDR S&P Transportation ETF (NYSEARCA:XTN) has fallen 9% over the past 12 months. That’s a dramatic divergence from the S&P 500, which is up 25% over the same time span.

There are several reasons for this. For one, the transportation ETF has investments in airlines and electric vertical takeoff and landing (eVTOL) companies, both of which have seen heavy volatility recently. In addition, broader macroeconomic concerns have caused investors to worry about falling freight volumes for cargo transportation companies.

However, given the selloffs across the sector, many of these fears are already baked into the sector’s stock prices. These are seven of the most promising transportation stocks in own for Q3 of this year and beyond.

FedEx (FDX)

FedEx (NYSE:FDX) is a gigantic transportation company primarily engaged in parcel delivery services. With annual revenues of more than $80 billion, FedEx is an integral part of the logistics network that ships freight around North America and internationally.

For years, FedEx had a simple attractive investment narrative around growth from e-commerce shopping. People ordering from the internet, rather than going to the mall, was a fantastic development for the parcel delivery industry.

However, investors soured on this theme in recent years due to worries that Amazon (NASDAQ:AMZN) would eat into the market. However, it seems that Amazon has dialed back its investments in logistics and fulfillment assets. While Amazon and other competitors are certainly a concern, FedEx’s core market remains robust.

The company’s most recent earnings report reaffirmed that view. FDX spiked 15% higher following a strong report and news around strategic actions to further improve profitability. This has some analysts suggesting that FDX stock could have 100% upside from here.

Airbus (EADSY)

Aircraft manufacturer Airbus (OTCMKTS:EADSY) has a tremendous opportunity right now.

The large aircraft market is effectively a duopoly, with only Airbus and Boeing (NYSE:BA) offering the largest classes and highest-range jets available for commercial aviation. While there is some competition in the regional jet market, Boeing and Airbus have tremendous pricing power for their models such as Boeing 747s and Airbus A380s.

And, for the time being, Boeing is facing tremendous scrutiny. After a series of crashes and other technical mishaps, regulators are laying into the company. In fact, Boeing recently pled guilty to criminal charges related to past accidents. And Boeing mechanics allege that unsafe behavior has continued to occur at the company.

This should lead to an improved outlook for Airbus, as the only viable competitor for larger-class jets. Indeed, the industry is facing a plane shortage right now, so Airbus should have a huge demand ramp-up in coming months and years. EADSY stock has dipped over the past quarter, offering investors an improved entry point right now.

Union Pacific (UNP)

Union Pacific (NYSE:UNP) is one of North America’s class one railroads. It has dominant market share on many freight routes within the western part of the U.S.

In addition, Union Pacific has been active in the Mexican market for over 30 years. It jumped onto that trend just prior to the time the NAFTA free trade deal went into effect. Also, Union Pacific owns more than one-quarter of a leading Mexican railroad, Ferromex, giving it upside from Mexico’s growing manufacturing boom.

UNP stock is down around 5% year-to-date (YTD). Analysts are worried that a slowing economy may lower freight demand. That’s certainly a valid concern. But upcoming interest rate cuts may jumpstart freight shipments. In any case, with the recent underperformance, Union Pacific is on offer at a fair 20 times forward earnings today.

Grupo Aeroportuario del Centro Norte (OMAB)

Grupo Aeroportuario del Centro Norte (NASDAQ:OMAB) — or North Central Airport Group in English — is a private Mexican airport operator.

About 25 years ago, Mexico’s government decided to privatize the majority of its country’s commercial airports, splitting them up into four distinct operating groups. OMAB got the key airports near the U.S.-Mexican border that are now at the center of the current reshoring/manufacturing boom.

The company’s flagship airport serves Monterrey, which is Mexico’s second largest urban area, trailing only Mexico City. Monterrey is also Mexico’s hub for numerous manufacturing industries including automobiles. That was reflected in Tesla’s (NASDAQ:TSLA) decision to locate its multi-billion dollar gigafactory in Monterrey. As more businesses locate in Monterrey, that should increase both business travel and freight-related services at the city’s airport.

Further, OMAB has been able to cash in on the rising prosperity in its region. It has grown its revenues from $451 million in 2019 to $851 million in 2023, showing tremendous upside despite the Covid-19 related traffic disruption. In addition, this business is highly profitable, trading around 15 times forward earnings while offering a 7% dividend yield.

Corporacion America Airports (CAAP)

Airports are a tremendous asset class. They have a monopoly within their local market. And travelers are generally not price sensitive and are willing to splash out a lot on money on food, drinks and duty-free shopping. Airports have other attractive ancillary revenue streams as well like hotels, car rentals and advertising.

This makes Corporacion America Airports (NYSE:CAAP) an attractive investment. It is the largest private airport operator in the world by number of airports held.

Corporacion America Airports is most known for its dozens of Argentine airport properties, including the facilities serving the Buenos Aires metropolitan area. The airport group also holds airports in Italy, Armenia, Ecuador, Brazil and Uruguay.

CAAP stock had collapsed following its 2018 IPO. It fell victim to the one-two punch of the Argentina hyperinflation crisis and the 2020 travel shutdowns. However, the stock has come roaring back, rising almost 1,000% from its lows, as travel demand has surged to new highs.

Also, reasons for optimism shine through on the political front. Argentina elected Javier Milei, a staunchly pro-business president, in its 2023 election. And there’s another positive. Milei previously served as the chief economist for Corporacion America Airports prior to entering politics. All this has CAAP stock set to lift off thanks to strong tailwinds on both the economic and political fronts.

Forward Air (FWRD)

Forward Air (NASDAQ:FWRD) is an air freight and logistics company. It operates in two segments of Expedited Freight and Intermodal. And it provides services such as local pick-up and delivery, less-than-truckload services, intermodal container drayage services and other such items. Forward Air serves various clients such as cargo carriers, freight forwarders, third-party logistics firms and retailers.

For many years, FWRD stock as on a steady upward trajectory. Shares rose from around $15 coming out of the 2008 financial crisis to its recent peak of more than $100. But disaster struck over the past year, with shares falling as much as 90% since July 2023.

That’s primarily due to a controversial merger with Omni Logistics. Omni itself was a rollup of several smaller freight companies. Many analysts and investors have been skeptical about how long it will take to combine Omni with Forward Air and wring out anticipated merger synergies.

However, the tide is turning. FWRD stock has doubled off its recent lows following the appointment of a new Chief Financial Officer (CFO) along with an activist investor taking a large stake in the company. As the company gets back on track, shares should have considerable upside.

J.B. Hunt Transport Services (JBHT)

J.B. Hunt Transport Services (NASDAQ:JBHT) is an intermodal transportation company which offers a variety of services for its end clients.

The company derives around half its revenues from shipping its own containers along class one railroads. It also offerw tailored fleet services, for-hire truckload, truck brokering and final-mile delivery services.

JBHT stock has historically been an expensive one compared to other transportation picks due to its strong management team and diversified business model. However, the stock has pulled back more than 15% YTD due to mounting concerns around the broader macroeconomic environment.

That gives investors a decent discount on this leading transportation stock. And the company could have considerable upside as it taps into AI functionality to improve its clients’ supply chains.

On the date of publication, Ian Bezek held a long position in CAAP and OMAB stock. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

On the date of publication, the responsible editor did not have (either directly or indirectly) any positions in the securities mentioned in this article.