We use cookies to understand how you use our site and to improve your experience.
This includes personalizing content and advertising.
By pressing "Accept All" or closing out of this banner, you consent to the use of all cookies and similar technologies and the sharing of information they collect with third parties.
You can reject marketing cookies by pressing "Deny Optional," but we still use essential, performance, and functional cookies.
In addition, whether you "Accept All," Deny Optional," click the X or otherwise continue to use the site, you accept our Privacy Policy and Terms of Service, revised from time to time.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
3 Air-Freight & Cargo Stocks to Watch in a Thriving Industry
Read MoreHide Full Article
The Zacks Transportation-Air Freight and Cargo industry is still dealing with persistent supply-chain challenges. The macroeconomic environment remains strained, with volatility stemming from the Iran conflict further dampening market sentiment.
Nevertheless, we believe the industry retains growth prospects, especially for companies emphasizing expansion initiatives and operational efficiencies. Despite the reopening of economies, consumer appetite for online shopping continues to be robust. Cost-control measures aimed at enhancing profitability are also encouraging. Companies such as United Parcel Service (UPS - Free Report) , FedEx (FDX - Free Report) and GXO Logistics (GXO - Free Report) are successfully leveraging these favorable dynamics.
Industry Overview
The companies belonging to the Zacks Transportation-Air Freight and Cargo industry provide air delivery and freight services. Most players in the space are involved in offering specialized transportation and logistics services. Some participants offer a range of supply-chain solutions, such as freight forwarding, customs brokerage, fulfillment, returns, financial transactions and repairs. The well-being of the companies in this industrial cohort is directly proportional to the health of the economy. Leading industry players, including FedEx, transport millions of packages each day across the globe. Apart from operating a ground fleet of multiple vehicles, some of these companies maintain an air fleet. While some players focus on providing air transportation services for passengers and cargo, others deliver services to entities that outsource air-cargo lifting requirements.
4 Key Trends to Watch in the Transportation-Air Freight & Cargo Industry
Emphasis on Shareholder Returns: As economic activity rebounds from pandemic-era lows, companies are increasingly using their growing cash reserves to reward shareholders through dividends and share buybacks. This reflects both financial resilience and confidence in future prospects. Within the Transportation-Air Freight and Cargo space, FedEx raised its quarterly dividend by 5.1% in 2025.
Cost-Control Measures to Support Profitability: Although inflation has shown some signs of easing, it remains elevated. The industry continues to face cost pressures, including higher expenses for labor, freight and fuel. To counter softer demand conditions, companies are prioritizing cost reductions while enhancing productivity and operational efficiency. These efforts have paid off, as evidenced by FedEx’s stronger-than-expected performance in the third quarter of fiscal 2026.
Demand Weakness Remains a Key Challenge: A slowdown in shipping demand, especially across Asia and Europe, is weighing on volumes. Subdued shipment levels are impacting the performance of major players in the industry. Ongoing geopolitical tensions and persistently high inflation are dampening consumer sentiment and growth outlooks. Additionally, weak freight rates are further constraining industry prospects.
E-commerce Continues to Be a Key Driver: While e-commerce growth has moderated from the surge seen during the pandemic due to economic reopening, it remains solid. The convenience of online shopping continues to support demand, alongside ongoing digitalization trends. Strength in e-commerce is expected to remain a crucial growth driver for companies in the industry.
Zacks Industry Rank Indicates Bullish Trends
The Zacks Air Freight and Cargo industry, housed within the broader Zacks Transportation sector, currently carries a Zacks Industry Rank #93. This rank places it in the top 38% of 243 Zacks industries.
The group’s Zacks Industry Rank, the average of the Zacks Rank of all member stocks, indicates sunny near-term prospects. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1.
The industry’s position in the top 50% of the Zacks-ranked industries is a result of a positive earnings outlook for the constituent companies in aggregate. Looking at the aggregate earnings estimate revisions, it appears that analysts are gradually gaining in confidence in this group’s earnings growth potential. The industry's earnings estimate for 2026 has increased 2% since February 2026.
Before we present a few stocks from the industry that investors can retain in their portfolios, let’s take a look at the industry’s recent stock market performance and the valuation picture.
Industry Surpasses the S&P 500 and the Sector
The Zacks Air Freight and Cargo industry has outperformed the Zacks S&P 500 composite as well as the broader Transportation sector over the past year.
The industry has gained 41.6% over this period compared with the S&P 500’s rise of 38.9% and the broader sector’s 33% uptick.
One-Year Price Performance
Industry's Current Valuation
On the basis of the trailing 12-month enterprise value-to-EBITDA (EV/EBITDA), a commonly used multiple for valuing Transportation-Air Freight and Cargo stocks, the industry is currently trading at 11.22X compared with the S&P 500’s 18.58X. It is also lower than the sector’s trailing 12-month EV/EBITDA of 11.75X.
Over the past five years, the industry has traded as high as 13.42X, as low as 7.4X and at the median of 10.08X.
Enterprise Value-to-EBITDA Ratio (TTM)
3 Transportation-Air Freight and Cargo Stocks to Keep a Tab On
UPS: The company is based in Atlanta. We are appreciative of the company's efforts to reward its shareholders through dividends and buybacks. Robust free cash flow generation by UPS is a major positive and leads to an uptick in shareholder-friendly activities.
Cost-cutting efforts are supporting its bottom line. Impressive e-commerce demand and expansion efforts should serve UPS well in the coming year. Its earnings outshone the Zacks Consensus Estimate in three of the past four quarters and missed once, the average beat being 10.72%.
Price and Consensus: UPS
FedEx: The company’s efforts to reward its shareholders even in these uncertain times are praiseworthy. Apart from paying dividends, FDX is active on the buyback front. FedEx's liquidity position is also solid. FDX’s efforts to cut costs are driving its bottom line.
The company’s earnings surpassed the Zacks Consensus Estimate in each of the past four quarters. The average beat is 13.13%.
Price and Consensus: FDX
GXO Logistics: We are impressed by GXO’s efforts to strengthen its logistics capabilities. Increased e-commerce, automation and outsourcing are serving the company well.
GXO’s earnings surpassed the Zacks Consensus Estimate in each of the past four quarters, the average beat being 5.25%. Its shares have surged 79% over the past year.
Price and Consensus: GXO
Zacks' 7 Best Strong Buy Stocks (New Research Report)
Valued at $99, click below to receive our just-released report
predicting the 7 stocks that will soar highest in the coming month.
View the Zacks #1 Rank List
Image: Bigstock
3 Air-Freight & Cargo Stocks to Watch in a Thriving Industry
The Zacks Transportation-Air Freight and Cargo industry is still dealing with persistent supply-chain challenges. The macroeconomic environment remains strained, with volatility stemming from the Iran conflict further dampening market sentiment.
Nevertheless, we believe the industry retains growth prospects, especially for companies emphasizing expansion initiatives and operational efficiencies. Despite the reopening of economies, consumer appetite for online shopping continues to be robust. Cost-control measures aimed at enhancing profitability are also encouraging. Companies such as United Parcel Service (UPS - Free Report) , FedEx (FDX - Free Report) and GXO Logistics (GXO - Free Report) are successfully leveraging these favorable dynamics.
Industry Overview
The companies belonging to the Zacks Transportation-Air Freight and Cargo industry provide air delivery and freight services. Most players in the space are involved in offering specialized transportation and logistics services. Some participants offer a range of supply-chain solutions, such as freight forwarding, customs brokerage, fulfillment, returns, financial transactions and repairs. The well-being of the companies in this industrial cohort is directly proportional to the health of the economy. Leading industry players, including FedEx, transport millions of packages each day across the globe. Apart from operating a ground fleet of multiple vehicles, some of these companies maintain an air fleet. While some players focus on providing air transportation services for passengers and cargo, others deliver services to entities that outsource air-cargo lifting requirements.
4 Key Trends to Watch in the Transportation-Air Freight & Cargo Industry
Emphasis on Shareholder Returns: As economic activity rebounds from pandemic-era lows, companies are increasingly using their growing cash reserves to reward shareholders through dividends and share buybacks. This reflects both financial resilience and confidence in future prospects. Within the Transportation-Air Freight and Cargo space, FedEx raised its quarterly dividend by 5.1% in 2025.
Cost-Control Measures to Support Profitability: Although inflation has shown some signs of easing, it remains elevated. The industry continues to face cost pressures, including higher expenses for labor, freight and fuel. To counter softer demand conditions, companies are prioritizing cost reductions while enhancing productivity and operational efficiency. These efforts have paid off, as evidenced by FedEx’s stronger-than-expected performance in the third quarter of fiscal 2026.
Demand Weakness Remains a Key Challenge: A slowdown in shipping demand, especially across Asia and Europe, is weighing on volumes. Subdued shipment levels are impacting the performance of major players in the industry. Ongoing geopolitical tensions and persistently high inflation are dampening consumer sentiment and growth outlooks. Additionally, weak freight rates are further constraining industry prospects.
E-commerce Continues to Be a Key Driver: While e-commerce growth has moderated from the surge seen during the pandemic due to economic reopening, it remains solid. The convenience of online shopping continues to support demand, alongside ongoing digitalization trends. Strength in e-commerce is expected to remain a crucial growth driver for companies in the industry.
Zacks Industry Rank Indicates Bullish Trends
The Zacks Air Freight and Cargo industry, housed within the broader Zacks Transportation sector, currently carries a Zacks Industry Rank #93. This rank places it in the top 38% of 243 Zacks industries.
The group’s Zacks Industry Rank, the average of the Zacks Rank of all member stocks, indicates sunny near-term prospects. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1.
The industry’s position in the top 50% of the Zacks-ranked industries is a result of a positive earnings outlook for the constituent companies in aggregate. Looking at the aggregate earnings estimate revisions, it appears that analysts are gradually gaining in confidence in this group’s earnings growth potential. The industry's earnings estimate for 2026 has increased 2% since February 2026.
Before we present a few stocks from the industry that investors can retain in their portfolios, let’s take a look at the industry’s recent stock market performance and the valuation picture.
Industry Surpasses the S&P 500 and the Sector
The Zacks Air Freight and Cargo industry has outperformed the Zacks S&P 500 composite as well as the broader Transportation sector over the past year.
The industry has gained 41.6% over this period compared with the S&P 500’s rise of 38.9% and the broader sector’s 33% uptick.
One-Year Price Performance
Industry's Current Valuation
On the basis of the trailing 12-month enterprise value-to-EBITDA (EV/EBITDA), a commonly used multiple for valuing Transportation-Air Freight and Cargo stocks, the industry is currently trading at 11.22X compared with the S&P 500’s 18.58X. It is also lower than the sector’s trailing 12-month EV/EBITDA of 11.75X.
Over the past five years, the industry has traded as high as 13.42X, as low as 7.4X and at the median of 10.08X.
Enterprise Value-to-EBITDA Ratio (TTM)
3 Transportation-Air Freight and Cargo Stocks to Keep a Tab On
The aforementioned stocks presently carry a Zacks Rank #3 (Hold) each. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
UPS: The company is based in Atlanta. We are appreciative of the company's efforts to reward its shareholders through dividends and buybacks. Robust free cash flow generation by UPS is a major positive and leads to an uptick in shareholder-friendly activities.
Cost-cutting efforts are supporting its bottom line. Impressive e-commerce demand and expansion efforts should serve UPS well in the coming year. Its earnings outshone the Zacks Consensus Estimate in three of the past four quarters and missed once, the average beat being 10.72%.
Price and Consensus: UPS
FedEx: The company’s efforts to reward its shareholders even in these uncertain times are praiseworthy. Apart from paying dividends, FDX is active on the buyback front. FedEx's liquidity position is also solid. FDX’s efforts to cut costs are driving its bottom line.
The company’s earnings surpassed the Zacks Consensus Estimate in each of the past four quarters. The average beat is 13.13%.
Price and Consensus: FDX
GXO Logistics: We are impressed by GXO’s efforts to strengthen its logistics capabilities. Increased e-commerce, automation and outsourcing are serving the company well.
GXO’s earnings surpassed the Zacks Consensus Estimate in each of the past four quarters, the average beat being 5.25%. Its shares have surged 79% over the past year.
Price and Consensus: GXO