What Happened?
Shares of freight delivery company Knight-Swift Transportation (NYSE: KNX) jumped 5.6% in the afternoon session after Bank of America Securities upgraded its rating on the company to Buy from Neutral and raised its price target. The bank also increased its price forecast for the stock to $50 from $41. The analyst behind the upgrade noted that Knight-Swift's earnings had likely reached their lowest point and were positioned to recover due to improving spot rate dynamics.
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What Is The Market Telling Us
Knight-Swift Transportation’s shares are not very volatile and have only had 9 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful, although it might not be something that would fundamentally change its perception of the business.
The previous big move we wrote about was 6 days ago when the stock dropped 5.5% as the U.S. threatened to impose "massive increases" to tariffs on China in response to new export controls from Beijing.
The potential countermeasures follow China's decision to place new restrictions on the export of strategic minerals and related products, including rare earths, which are critical for the defense, semiconductor, and manufacturing industries. This escalation in the economic competition between the two largest global economies is fueling investor anxiety. The new tariff threats raise concerns about disruptions to global supply chains, increased material costs for manufacturers, and a potential drag on an already sluggish economy. Industrial companies are particularly sensitive to these developments as they are often cyclical and heavily reliant on international trade.
Knight-Swift Transportation is down 11.2% since the beginning of the year, and at $46.80 per share, it is trading 21.5% below its 52-week high of $59.60 from November 2024. Investors who bought $1,000 worth of Knight-Swift Transportation’s shares 5 years ago would now be looking at an investment worth $1,147.
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