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The Dow Jones Transportation Average rose more than 8.4% in November to set a new high. Most components showed an increase, and only two of them decreased. The median move is about 6%, the average is nearly 9%, and the top companies are up double digits over the 30-day and 90-day lookback periods. This is important for the transportation sector and the economy as a whole, since good times for transportation stocks usually mean good times for everyone.

More importantly, according to Dow Theory, the transportation index’s move to new highs coincides with the Dow Jones Industrial Average, signaling a broad rally in the stock market. Driving this rally are robust economic health, lower interest rates and expectations for regulatory and tax policy tailwinds to develop in 2025.

Avis Budget Group Takes Dow Transportation Sector to New High

Avis Budget Group NASDAQ: CAR is the clear leader of November, rising 30%, continuing the recovery that began in September. As a result, shares are trading near a five-month high and showing support at critical moving averages. Support is visible at the 30 and 150 day EMAs, which form a golden crossover. A golden crossover is when the short-term moving average crosses above the long-term moving average. In this case, the two averages are consistent with widely used metrics and demonstrate the similarity of beliefs between short-term traders and long-term investors.

Avis Budget Group and the car rental industry will face challenges in 2024, but analysts are optimistic the industry will normalize and return to growth in 2025. Avis forecasts revenue will grow by about 2% and profitability will widen significantly. Consensus earnings forecasts, as reported by MarketBeat, call for growth of more than 100%. In terms of sentiment, the consensus rating has been upgraded to Moderate Buy from Hold in 2024, and the price target implies a 20% upside potential over the next 12 months.

United Airlines soars high: Expect a pullback

United Airlines NASDAQ: UAL The share price is set to rise strongly in 2024, up nearly 30% in November and 125% for the year. The rally is driven by robust growth, driven by travel demand and route expansion. Growth has slowed to low single digits in 2024, but profitability remains strong and a turning point is near. Revenue growth is expected to accelerate in the fourth quarter and then again in 2025, with revenue expected to grow nearly 7% in 2025 and margins to expand. Earnings growth is expected to approach 20%, which is good news for the capital return program. The company hasn’t paid a dividend in years but resumed share repurchases in the fourth quarter. At the time of the announcement, the new permit was worth $1.5 billion, or more than 5% of the market capitalization.

The consensus price target reported by MarketBeat lags the price action, but the revision trend is bullish. Consensus sentiment is up from Buy from Moderate Buy amid activity in November, and the price target has risen nearly 50% over the past year. The most recent targets lead to the upper end of the range, which is good for a 50% increase in the share price from the November closing price.

Rider is trending upward: convergences suggest the uptrend will continue

Ryder Systems New York Stock Exchange: R The share price is up almost 100% over the past year, and the convergence of indicators suggests the uptrend will continue. Convergences exist in the MACD and Stochastics, which shows that the bulls are in control of this market. The price may retreat in December, but the upward trend will continue.

Critical resistance is near $170 and the highs set in November, while critical support is near $150 and the top of the October consolidation zone. The upward trend is driven by renewed growth in 2024, outperformance of net income and expectations of acceleration and broader profitability in 2025. Projections for 2025 include revenue growth of nearly 9% and profit growth of 14%.

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