Heartland Express Has Tools To Offset A Cyclical Trucking Correction

Nov. 08, 2022 2:22 PM ETHeartland Express, Inc. (HTLD)JBHT, KNX, TFII, TFII:CA
Stephen Simpson profile picture
Stephen Simpson


  • Heartland posted mixed third quarter results, with better revenue and weaker operating ratio than expected, but in-line EPS.
  • Management acknowledged signs of weakness in the freight market, but believes they will still see single-digit contract price increases in 2023, as well as expense synergies from recent M&A.
  • Given that spot rates and other industry metrics are rolling over, assumptions about 2023 could be a little optimistic, but I like the long-term potential of the CFI acquisition.
  • It's risky to buy into the start of a cyclical downturn, but Heartland's valuation seems to embed a more serious correction and/or weaker recovery/long-term outlook than I think is likely.

"Heartland Express" Semi-Truck

DakotaSmith/iStock Editorial via Getty Images

Times are starting to get tough in the trucking industry. High channel inventories and weakening end-user demand are undermining the demand side of the equation and there is now significantly more capacity in the market. With

This article was written by

Stephen Simpson profile picture
Stephen Simpson is a freelance financial writer and investor. Spent close to 15 years on the Street (sell-side, buy-side, equities, bonds); now a semi-retired raccoon rancher. That last part isn't entirely true. Probably.

Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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