Railroads are feeling some pain due to ongoing trade uncertainty, but it is yet to trickle down to the companies to railroad suppliers.

Shares of Wabtec (NYSE: WAB), formerly known as Westinghouse Air Brake Technologies, were trading up 10% at 10:30 a.m. Eastern after the locomotive manufacturer beat quarterly earnings expectations and provided a more optimistic outlook for the full year.

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Profitability on the rise

Wabtec manufacturers and services a range of heathy industrial equipment, including rail locomotives. The transportation sector has been in a rut lately as macro issues have caused a pullback in inventories, but companies are still buying Wabtec equipment.

The company earned $2.28 per share in the quarter on revenue of $2.61 billion, beating the consensus profit estimate by $0.25 per share while matching expectations on revenue. Revenue was up 4.5% year-over-year, and Wabtec improved its operating margin by 190 basis points to 22.1%.

Wabtec said that international revenue helped boost results. The growing global fleet is also helping the company to expand the service, components, and digital recurring revenue side of the business.

Is Wabtec stock a buy?

The company expects the momentum to continue. Wabtec boosted the upper end of its full-year earnings guidance to $8.95 per share from $8.75 per share while keeping the lower end intact.

CEO Rafael Santana said that the company is "approaching the remainder of the year with caution but with the discipline and focus to take the necessary actions to deliver against our commitments in an uncertain and volatile economic landscape."

If conditions worsen, Wabtec is unlikely to be immune from a recession, but the company's long-term strategy to build its global business and lean more on recurring servicing revenue instead of just new equipment sales appears to be paying off. For those with a long-term mindset, Wabtec could be an attractive addition to a diversified portfolio.

Should you invest $1,000 in Westinghouse Air Brake Technologies right now?

Before you buy stock in Westinghouse Air Brake Technologies, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Westinghouse Air Brake Technologies wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

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Lou Whiteman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Westinghouse Air Brake Technologies. The Motley Fool has a disclosure policy.

Airlines are among the most discretionary sectors out there, tied closely to the health of the consumer. So, perhaps it is no surprise that the stocks are seeing an oversize reaction to reports suggesting key parties are moving to de-escalate the trade war gripping the U.S. economy.

Shares of JetBlue Airways (NASDAQ: JBLU) traded up 10% as of 10 a.m. ET, and shares of United Airlines Holdings (NASDAQ: UAL), Delta Air Lines (NYSE: DAL), American Airlines Group (NASDAQ: AAL), and Southwest Airlines (NYSE: LUV) were all up more than 5%.

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Clear skies up ahead?

We are only halfway through airline earnings season, but the message from the companies that have reported is clear: The industry is not seeing a dramatic fall-off from near-record demand, but executives are anticipating declines in demand should tariffs eat into the economy and cut consumer purchasing power.

Historically, airlines have been a bad sector to invest in during a recession. Households struggling to pay bills and afford groceries are unlikely to book vacations.

On Wednesday, investors were buying in hopes a worst-case scenario could be avoided. The market is up big on reports that the White House is mulling cuts to steep tariffs on Chinese imports, a move that could lessen the blow on consumers and lower the odds the U.S. falls into a recession in the second half of 2025.

Is now the time to buy airline stocks?

Investors should proceed with caution from here. The market has been volatile of late, trading up and down based on the latest tariff headlines. It is dangerous to try to get ahead of rumors, and until there are actual moves to de-escalate, it is possible these gains could evaporate just as quickly as they materialized.

For those willing to accept the turbulence and look past whatever near-term noise might be on the horizon, Delta and United are the safest investment choices from this group. JetBlue and American have relatively high debt burdens and questions about their revenue models, and Southwest is in the process of eliminating consumer-friendly policies and could see a backlash in the quarters to come.

United execs sounded an optimistic tone about the quarters to come even with the headwinds the airline is currently facing. If those headwinds recede, the airline looks best-positioned to gain altitude from here.

Should you invest $1,000 in United Airlines right now?

Before you buy stock in United Airlines, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and United Airlines wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $561,046!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $606,106!*

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Lou Whiteman has no position in any of the stocks mentioned. The Motley Fool recommends Delta Air Lines and Southwest Airlines. The Motley Fool has a disclosure policy.

Old Dominion Freight Line (NASDAQ: ODFL) is feeling the pinch from global trade uncertainty, but the impact isn't as bad as investors had feared. Shares of Old Dominion were trading up 9% as of 10 a.m. ET after the company reported better-than-expected results Wednesday morning. But the stock had given all that back in the next 30 minutes.

Driving into headwinds

Trucking company Old Dominion earned $1.19 per share in the first quarter on revenue of $1.37 billion, beating Wall Street's $1.14 per-share consensus profit estimate and matching the top-line estimate. Revenue was down 6% year over year and net income fell by 13%, but investors had been bracing for far worse results.

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Old Dominion specializes in domestic less-than-truckload shipping, meaning it transports freight for multiple customers from distribution centers. CEO Marty Freeman said that the results "reflect the ongoing softness in the domestic economy."

This is a business that benefits from scale. Old Dominion's operating ratio-- a measure of expenses compared to revenue -- rose 190 basis points to 75.4%. Freeman said the decreased volumes had a "deleveraging effect on many of our operating expenses."

Is Old Dominion stock a buy?

Investors should not expect a quick turnaround for this business. Freeman said "there continues to be uncertainty" in the economy, and with the full impact of tariffs only now beginning to hit U.S. ports, there will likely be a further slowdown in domestic trucking up ahead.

The good news is Old Dominion has the wherewithal to survive a downturn, and its best-of-class operations should help it to recover along with the economy. But trading at 30 times forward earnings in the face of a near-term slowdown, the stock can hardly be called inexpensive.

Old Dominion is a solid hold right now, but there is no reason to jump in and buy in this environment.

Should you invest $1,000 in Old Dominion Freight Line right now?

Before you buy stock in Old Dominion Freight Line, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Old Dominion Freight Line wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $561,046!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $606,106!*

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Lou Whiteman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Old Dominion Freight Line. The Motley Fool recommends the following options: long January 2026 $195 calls on Old Dominion Freight Line and short January 2026 $200 calls on Old Dominion Freight Line. The Motley Fool has a disclosure policy.

Investors are looking for winners as government officials inch closer to a defense budget, and Huntington Ingalls (NYSE: HII) looks like a potential winner. Shares of the shipbuilder are trading up 5% on Friday as I write this after receiving a double upgrade from Goldman Sachs.

Opportunities ahead

Huntington Ingalls is one of two primary shipbuilders for the U.S. Navy, operating out of the Newport News shipyard in Virginia and smaller yards on the Gulf Coast. The company is the nation's sole builder of aircraft carriers and makes much of the U.S. nuclear sub fleet.

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The defense company has been sailing through choppy waters of late. It takes years to build these big vessels, and Huntington Ingalls in some cases is still operating under contracts signed before the pandemic. Labor and raw material costs have soared since then, and in many cases Huntington Ingalls has been forced to eat that added expense.

But Goldman Sachs analyst Noah Poponak sees clear sailing up ahead. The bank yesterday upgraded Huntington Ingalls to buy, from sell, and upped its price target to $234, from $145. The stock closed Thursday at $201.

The analyst believes Navy shipbuilding will be a relatively high priority for the Pentagon in the years to come. Huntington Ingalls could also benefit from the administration's focus on domestic labor issues and supply chains.

Earlier in the week, Navy Secretary John Phelan said domestic shipyards are "a big, big priority for the president."

Is Huntington Ingalls a buy?

Huntington shares are down nearly 30% from their early 2024 highs. It appears the tide might be turning in its favor, but investors should be patient.

This is not a quick-change industry. New ship awards today will not generate revenue for years, and any talk of new shipyards, even if funded by the government, would take nearly a decade to pay off for investors. That leaves a lot of time for plans to change, and priorities to shift.

There's some security for investors knowing companies like Huntington Ingalls are deemed essential, which hopefully limits the downside. But the upside from here could still take time.

Should you invest $1,000 in Huntington Ingalls Industries right now?

Before you buy stock in Huntington Ingalls Industries, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Huntington Ingalls Industries wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $496,779!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $659,306!*

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Lou Whiteman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Goldman Sachs Group. The Motley Fool has a disclosure policy.