2025 Stifel Transportation Outlook

Stifel analyst J. Bruce Chan released a new report on the US transport sector on Wednesday.

The analyst said, "Marking the conclusion of the most extreme cycle in industry history, 2024 largely proved to be the slow transition back to normalcy that we'd anticipated it being a year ago (see here). Entering 2025 with earnings expectations reset lower and investors adjusted to this "new normal", we believe there are plenty of variables and tail risks that could bring unexpected outcomes in the year ahead. Unique characteristics muddying demand expectations of this upcycle vis-à-vis priors include: 1) stubborn inflation and wary consumers amid full employment, 2) multi-year contractionary industrial signals amid higher-for-longer interest rates, 3) geopolitical turmoil with cheap oil, 4) strong dollar ahead of aggressive trade policy and tariff regime. We view T&L equity valuations as unappreciative of the unique demand risks in today’s supplydriven recovery, and highlight self-help stories and opportunities with secular growth."

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