Stifel cuts ArcBest stock price target to $83 from $102

On Wednesday, Stifel analysts adjusted their outlook on ArcBest Corp (NASDAQ:ARCB), reducing the price target to $83.00 from the previous $102.00. Despite this change, they maintained a Buy rating on the company’s shares. Currently trading at $57.06 with a P/E ratio of 7.5x, InvestingPro analysis suggests the stock is undervalued. The revision followed the first quarter 2025 earnings report, where ArcBest achieved an adjusted earnings per share (EPS) of $0.51, aligning with Street consensus but falling a cent short of Stifel’s model due to slightly lower brokerage revenue.

ArcBest’s operating ratio for the quarter was reported at 98.2%, which met the general market expectations. The analysts noted that the performance was not overly negative, especially when considering the broader challenges in the freight industry and the disappointing results from some of ArcBest’s less-than-truckload (LTL) competitors. The stock has faced significant pressure, declining 45.42% over the past six months and currently trading near its 52-week low of $55.52.

Despite a generally in-line quarter, ArcBest’s stock experienced a decline, which Stifel attributed to weaker pricing metrics that slowed down as the quarter ended and continued into April. Nevertheless, the management’s commentary during the earnings call provided a somewhat optimistic outlook. The guidance for the second quarter of 2025 suggests a return to typical seasonal patterns, and the company’s capital expenditure forecast remains steady for the rest of the year.

The report also highlighted a positive shift for ArcBest, noting that after losing some market share during the economic downturn, the company’s core LTL volumes have begun to grow once more. Stifel analysts believe that ArcBest has the potential for a valuation increase based on improved execution, although they also recognize that a stronger market environment would likely be necessary for this re-rating to occur.

In other recent news, ArcBest Corp reported its first quarter 2025 earnings, slightly missing both earnings per share (EPS) and revenue forecasts. The company posted an EPS of $0.51, just below the forecasted $0.52, and reported revenue of $967.08 million, falling short of the $989.28 million expectation. This represents a 7% year-over-year decline in revenue, highlighting ongoing challenges in the market environment. ArcBest’s non-GAAP operating income also decreased significantly, falling to $17 million from $43 million in the same quarter last year. Despite these setbacks, the company is focusing on operational efficiency and cost management, anticipating a 300-400 basis point improvement in its operating ratio in the second quarter. Analysts from Stephens Inc. and Wolfe Research engaged with ArcBest during their earnings call, inquiring about the company’s strategies to navigate current market challenges. ArcBest emphasized its commitment to customer retention and pricing strategies as key strengths in the current environment. The company also plans to continue enhancing its digital capabilities and expanding its customer base among small and medium-sized businesses.

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