Knight-Swift $KNX Getting Ahead Of Itself on Freight-Hype. SellKnight-Swift, $KNX, the largest trucking company in the US, rallied yesterday after the earnings release of competitor J. B. Hunt $JBHT. J. B. Hunt's earnings yesterday were mostly inline, but these better-than-feared numbers eased the idea of a major transport downturn. Here's the daily chart for J. B. Hunt $JBHT.
So today, the day after that nice rally, Knight-Swift cuts its outlook pretty drastically. The cut both EPS for Q2 and Q3 down 10% of what was expected. They cite "oversupply of capacity" in the freight market which "resulted in greater than expected downward pressure on revenue per loaded mile", which is a lot of words to say that competition is eating their lunch.
In response, the stock gapped down today, but only closed down 2%. I think it's reasonable to speculate that the buyers, which were bullish on $KNX because of $JBHT's positive earnings, will now have to sell, and send the stock price back to the bottom of the range.
A sensible thesis is that if the stock can crack $34 to the downside, we may see $27-$30 in the next days after.
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