Knight-Swift Under Siege: Tariffs and Freight Woes Spark Analyst Downgrade

Ladies and gentlemen, buckle up! We're diving headfirst into the chaos that's engulfing Knight-Swift Transportation Holdings Inc (KNX). The stock has taken a nosedive, and it's all thanks to the perfect storm of tariffs and plummeting freight flows. BofA Securities analyst Ken Hoexter just pulled the rug out from under KNX, downgrading the stock from Buy to Neutral and slashing the price target from $66.00 to $46.00. This is a bloodbath, folks!



The writing was on the wall, but nobody wanted to see it. Tariffs, tariffs, tariffs! President Trump's trade policies have sent shockwaves through the industry, and KNX is feeling the brunt of it. The company's earnings estimates have been slashed by a whopping 35% for the first quarter, 20% for the second quarter, 17% for FY25, and 11% for FY26. That's a brutal beating, and it's all thanks to early first-quarter weather disruptions and weakened freight flows amid tariff concerns.

But wait, there's more! Truckload spot rates have plummeted to $1.50 per mile, which is barely breakeven for truckers. This is a disaster, folks! KNX is projected to shrink its truckload (TL) fleet by 1.5% sequentially in the first-quarter to 21,900 tractors. That's a massive hit to their operational efficiency and profitability.

And if that wasn't enough, KNX is facing challenges across its Less-Than-Truckload (LTL), Intermodal, and Logistics divisions. Lower demand is pressuring Intermodal volumes and bid season rates, while the Logistics segment faced early first-quarter struggles before stabilizing later in the quarter. Weather-related costs are expected to impact LTL results, prompting an upward revision of the first-quarter LTL operating ratio target to 94.6% from 94.1%.



So, what's a company to do in the face of such adversity? Well, KNX needs to get creative and fast. They need to diversify their revenue streams, optimize their fleet management, enhance contract bid premiums, invest in technology and innovation, explore new markets, and improve customer relationships. This is a no-brainer, folks! They need to do everything in their power to mitigate the effects of reduced freight flows and declining truckload spot rates.

But let's not forget the bigger picture. The transportation industry is caught in the crosscurrents of global trade policies. Higher tariffs can lead to higher shipping costs, supply chain adjustments, fluctuations in cargo volumes, and potential job shifts. This is a nightmare scenario, folks! The industry needs to brace itself for the long-term effects of these tariffs on jobs and company health within transportation.

So, what's the bottom line? KNX is under siege, and it's going to take a lot of work to turn things around. But remember, folks, this is the market. It's unpredictable, it's chaotic, and it's always full of surprises. So, stay tuned, stay alert, and stay ahead of the game. Because in this market, you either adapt or you die. And KNX needs to adapt, and fast!