Morgan Stanley Downgrades U.S. Xpress Enterprises Amid Industry Downgrade

Morgan Stanley analyst Ravi Shanker lowered his Freight Transportation industry view from In-Line to Cautious.
Reflecting on the industry view, he downgraded US Xpress Enterprises Inc USX to Equal Weight from Overweight and lowered the price target to $10 (an upside of 44%), from $12.
The transportation cycle is "probably closer to the end than the middle," contends Shanker. He thinks 2022 is likely to see the momentum continue into the first half, but then he does not see significant upside to the cycle from there, barring another pandemic outbreak causing new disruptions or major weather events.
Shanker expects inventory levels at shippers to normalize by mid-2022, by which time supply chain congestion should also see relief, leading to a weaker second half of the year for the sector.
Price Action: USX shares are trading lower by 5.31% at $6.95 on the last check Thursday.