3 Trucking Stocks Leading the Way in Market Momentum

Key Points

• Three stocks in the transportation sector broke out this week, giving investors what may be the start of a longer-lasting rally.
• Wall Street analysts understand that the fundamental tailwinds are there to back a continued uptrend in these names.
• Institutional capital has also entered these stocks, confirming that investors can see sustained upside in 2025.

Price action is typically the first sign of the market’s sentiment toward a stock, industry, or group of stocks, which means that breakout stocks or ones that have seen favorable price action lately are bound to keep doing well just as long as the initial reason for a breakout is sustainable and rooted in strong fundamental themes. Today, this is the case for a list of transportation stocks, particularly in the trucking industry.

The fundamental reasons will become clear in just a bit, where investors can connect the dots between underlying business activity in the United States economy, breakouts in new orders for manufacturing, and the mix of President Trump quoting his interest to bring down the nation’s interest rates. This would make a perfect cocktail to bring a sustained rally in today’s list of stocks.

These names include shares of Old Dominion Freight Line Inc. NASDAQ: ODFL and the more renowned names in the space, such as SAIA Inc. NASDAQ: SAIA or its close competitor and peer XPO Inc. NYSE: XPO, to give investors all of the price action they need over the past five days to extrapolate a potentially longer run to higher valuations. With something for every portfolio, here are the reasons why this list is worth keeping a watch on.

Old Dominion Freight Line Stock: An Analyst’s Pick

As of December 2024, analysts from Goldman Sachs decided to boost Old Dominion Freight Line stock, this time seeing a valuation of up to $235 a share. With this new view, these analysts expect the stock to make a new 52-week high and price in a net rally potential of up to 23.1% from where it trades today.

Apart from this bullish factor, investors can lean on the recent price action for Old Dominion stock, which pushed a net rally of as much as 5% over the past month alone. However bullish this may seem, it isn’t the only sign of potential higher prices in the near future for this stock.

Institutional buyers from Janney Montgomery Scott decided to boost their holdings in Old Dominion Freight Line stock by 7.5% as of January 2025, bringing their net position to a high of $15.3 million today. There is, however, another point of confirmation coming out of the broader market for this stock, which its valuation multiples can confirm.

Since it trades at a price-to-book (P/B) ratio of 9.8x today, it represents a steep premium to the transportation sector’s average valuation of 2.2x today. Some investors will default to classic value schools of thought and call this stock expensive; others will understand that the market always pays a premium for the stocks it believes will outperform.

SAIA Stock Calls in Institutional Buyers

As of January 2025, those from Davenport & Co. decided to boost their holdings in SAIA stock by as much as 813.5% from their previous position. This new allocation brought their entire stake to a high of $13.6 million today. To be taken as the first of other bullish pillars, investors can lean on this institutional interest to start building a bull case.

Another greatly important factor can be taken from how the stock broke out by as much as 1.5% in just the past five days. It's not common for a company with $13.1 billion in market capitalization to move around, signaling investors that there is definitely some market interest behind this stock.

The reasons for being bullish on these trucking stocks are clear. With increased business activity in the United States economy, trucking and logistics services will see some of the first waves of interest coming out of the rest of the market.

That is why analysts from Barclays also decided to reiterate an overweight rating on SAIA stock as of January 2025 and place it at a $600 a share valuation, calling for as much as 21.4% upside from where it trades today and also bringing it closer to its 52-week high of $628.

A Premium Justified for XPO Stock

Even though Old Dominion Freight Line trades at a steep premium, XPO calls for the most premium on this list as it trades at a P/B multiple of 12.7x, above both its peer’s 9.8x and the industry’s 4.2x average. However, the market’s optimistic view is not the only one in favor of XPO breaking out today.

After a rally over the past five days, some still believe the stock has a higher ceiling ahead of it. Investors can check this trend by checking the $176 valuation placed on it by Oppenheimer analysts as of December 2024.

This valuation, along with an outperform rating, means that XPO stock needs to rally by 26.6% from where it trades today, not to mention make a new 52-week high.

These bullish factors, or XPO stock, were enough to trigger up to $1.7 billion in institutional capital to make its way into it over the past 12 months as well.