The transportation sector is entering a pivotal moment, presenting investors with a unique contrast between air travel and freight logistics. Airlines are preparing for a record holiday travel surge, while freight carriers navigate the final, difficult stretch of a cyclical downturn. This environment often creates opportunities where strong, resilient businesses are temporarily held back by macro pressures, positioning them for meaningful long-term recovery.
Two such companies, Alaska Air Group (ALK) and Schneider National (SNDR), are currently trading near their 52-week lows, yet both possess powerful long-term growth catalysts. With both companies reporting earnings this week, the timing offers investors an opportunity to analyze their strategic shifts and potential rebound trajectory toward 2026.
Alaska Air Group (ALK): Flying into Peak Demand with a Merger Tailwind
Alaska Air Group, Inc. (ALK) is a North American airline holding company with a dominant market presence on the U.S. West Coast, anchored by its core hub in Seattle. The business model emphasizes operational efficiency, a value-focused customer experience, and maximizing revenue from its highly valued Mileage Plan™ loyalty program. This loyalty stream provides a critical, high-margin revenue base, accounting for roughly 16% of total 2024 revenue.
The airline sector remains highly sensitive to macroeconomic forces, including volatile fuel costs and labor expenses from recently ratified agreements. Q1 2025 results reflected these pressures, noting a softening demand environment that began to impact performance. However, seasonal factors point to an expected strength in holiday traffic, offering a near-term boost.
The Hawaiian Airlines Catalyst and Q3 Performance
The central pillar of ALK’s growth strategy is the acquisition of Hawaiian Airlines, which closed in September 2024. This merger is designed to expand the network into key leisure markets, enhance the international gateway, and unlock significant value. ALK is aggressively targeting $1 billion in incremental pre-tax profit over the next three years, including at least $500 million in synergies from the integration.
The company’s Q3 2025 performance, which included Hawaiian Airlines results post-acquisition, showed strong year-over-year revenue growth of 23%, driven by a 21% jump in passenger revenue. However, adjusted Earnings Per Share (EPS) declined and missed analyst consensus. This miss was attributed to higher-than-expected operating expenses, excluding fuel, and initial integration costs related to the merger. Revenue per Available Seat Mile (RASM) also fell slightly by 0.5%, indicating capacity grew faster than revenue.
Path to $10 EPS and Valuation
ALK has a defined path to sustained profitability via its “Alaska Accelerate” plan, targeting 11% to 13% adjusted pre-tax margins and an ambitious EPS of at least $10 by 2027. Success hinges on the effective integration of Hawaiian Airlines and the realization of targeted synergies.
The stock is currently trading significantly below multiple financial assessments, which suggest an intrinsic value ranging from approximately $66.69 to over $100.54 per share. While the market Price-to-Earnings (P/E) ratio appears high, analysts view this as a temporary market discount tied to integration costs, arguing the long-term growth potential is undervalued.
- Consensus Rating: Strong Buy.
- Average 12-Month Price Target: $66.79 to $67.79 (Approx. 71% upside).
- Long-Term Target: $10.00+ EPS by 2027.
ALK presents a compelling value opportunity as it moves into the high-traffic holiday season. The short-term stock dip is directly linked to initial merger friction and macro uncertainty, yet the strategic plan for profit growth through the combined entity remains intact. Investors seeking a discounted airline stock with robust loyalty economics and a clear, defined path to high long-term EPS should monitor ALK closely.
Schneider National (SNDR): Logistics Leader Navigating the Freight Lows
Schneider National, Inc. (SNDR) is a premier multimodal provider of transportation and logistics services across North America. With a model built on asset-based and non-asset-based solutions, Schneider is a comprehensive supply chain partner known for its technological advancements and disciplined growth, which help mitigate the inherent cyclicality of the freight market.
SNDR generates revenue across three core segments: Truckload, Intermodal (IM), and Logistics. The asset-based Truckload business is increasingly anchored by its high-retention, stable Dedicated services, which now account for about 70% of the fleet. The Intermodal segment, which combines truck and rail, is a key high-growth area, especially in the Mexico cross-border lanes.
Cyclical Headwinds and Strategic Resilience
The company is currently operating within a soft freight market, characterized by excess trucking capacity, low volumes, and retreating spot rates. This environment applies significant margin pressure, particularly on the one-way Network Truckload segment. Compounding the challenge are rising costs for insurance, maintenance, and equipment.
Despite the cyclical downturn, Schneider is focused on strategic resilience. The late 2024 acquisition of Cowan Systems, LLC further bolstered its high-margin Dedicated Truckload segment, making it one of the largest dedicated carriers in the industry. The company is also pursuing an aggressive cost-reduction initiative, targeting over $40 million in savings through productivity and targeted headcount reductions.
Q3 Performance and Recovery Outlook
In Q3 2025, Schneider reported revenue growth driven by the Cowan Systems acquisition and strong volume expansion in Intermodal, particularly in Mexico. However, net income and adjusted EPS declined, missing expectations due to the weak underlying freight market, persistent cost inflation, and a notable $16 million headwind from claims-related costs. Strategic resilience was evident in strong Intermodal volume growth (up over 50%) and market share gains in its core asset-based segments.
Schneider’s profitability path centers on leveraging internal efficiencies and positioning for the inevitable freight market cycle turn. The continued expansion of the higher-margin Dedicated and Intermodal segments is central to improving the overall profit mix. When capacity inevitably tightens—expected to drive stronger rate renewals in 2026—Schneider is well-positioned to capitalize.
- Consensus Rating: Hold/Neutral (with recent Buy/Outperform ratings).
- Average 12-Month Price Target: $26.98 (Approx. 30% upside).
- Earnings Estimate: $1.14 EPS forecast for full-year 2026 (up from $0.70 in 2025).
Currently trading near its 52-week low, SNDR is a pure-play investment on the eventual freight recovery, supported by a diversified asset base. The high P/E ratio suggests the market is discounting near-term softness while pricing in the long-term rebound. Investors with a one-to-two-year horizon may find this an opportune time to establish a position ahead of the projected cycle upswing.
Final Synthesis: Two Paths to Value in Transportation
Alaska Air Group and Schneider National are both compelling long-term plays trading at suppressed valuations, but they represent fundamentally different investment theses for the 2026 breakout.
The case for ALK is centered on a short-term catalyst—peak holiday travel—and a powerful, self-directed growth engine: the Hawaiian Airlines merger. Investors are betting on management’s ability to execute a $1 billion synergy plan and achieve the $10 EPS target by 2027.
The case for SNDR is a classic cyclical recovery bet. While constrained by the current freight downturn, the company is using this period to aggressively grow its stable Dedicated segment, cut costs, and position its Intermodal business for market share gains. Investors here are betting on the macro turn that will realize the 2026 earnings expansion.
The two stocks offer distinct risk/reward profiles:
- ALK: High-upside growth stock driven by M&A integration and core loyalty strength.
- SNDR: Cyclically undervalued stock positioned for a durable earnings rebound as the freight market recovers.