Morgan Stanley Shares Highlights From Freight Conference

Morgan Stanley hosted its fourth Annual Industrials Conference and provided the following takeaways:

Kansas City Southern

Kansas City Southern (NYSE: KSU)'s management team said its third-quarter-to-date revenue and carloads are lower by 4 percent, and the company continues to expect revenue to grow at a mid-single-digit rate sequentially.

Kansas City Southern Chief Marketing Officer Brian Hancock also acknowledged the company has been anticipating an investigation over the past year regarding fair competition in Mexico, but the outcome is not expected to cause major concern.

XPO Logistics

XPO Logistics Inc (NYSE: XPO)'s Chief Strategy Officer Scott Malat said that the company's third-quarter trends thus far are consistent with what the company has seen in the prior quarter.

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Malat reiterated XPO Logistic's 2018 financial targets including $1.7 billion in EBITDA and $1 billion in cash flow. The executive expanded that its priority will be paying down debt and bring its net debt/EBITDA ratio to 3x. In addition, the company won't partake in M&A plans, and its sole focus is reducing costs.

The analysts noted that of all the executives that spoke, Malat "appeared most enthusiastic on platooning and autonomous technology."

Echo Global Logistics

Echo Global Logistics, Inc. (NASDAQ: ECHO)'s management team stated that its market capacity has "loosened" in August but showed some signs of "tightening" yet again in the first few weeks of September.

The company also suggested that the bankruptcy of Hanjin could prove to be a tailwind for its trucking business as shippers opt to move delayed freight from rail/intermodal to truck.

Less Than Truckload Shippers

Finally, the less than truckload shipping companies (LTL) — that is, transportation of relatively small freight — said the pricing environment is stable.

Old Dominion Freight Line (NASDAQ: ODFL)'s management said it is still seeing a 3 to 4 percent year-over-year increase on contractual renewals.

Saia Inc (NASDAQ: SAIA) said the pricing environment is similar to that of the prior quarter.

Moreover, Old Dominion Freight described the overall economy as being flat, while Saia said that its entire portfolio is lethargic.

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