Stifel cuts ArcBest stock target, buy rating held on robust financial

Published 15/01/2025, 16:30
Stifel cuts ArcBest stock target, buy rating held on robust financial

On Wednesday, Stifel analyst revised the stock price target for ArcBest Corp (NASDAQ:ARCB) to $109.00, down from the previous $114.00, while maintaining a Buy rating on the shares.

The assessment is based on a cautious outlook for the trucking industry, anticipating a slow and shallow recovery due to an abundance of supply and a lack of significant demand catalysts. He notes that this environment is affecting the less-than-truckload (LTL) sector, where ArcBest operates.

ArcBest's current stock price stands at $100.50, and despite the reduced price target, Stifel continues to see the company as a relative value play within the trucking industry.

The analyst believes that ArcBest's financial position is robust, citing the company's recent labor contract with its unionized workforce as a positive factor. This contract has established the company's cost structure for the next five years, providing stability in contrast to competitors who are still adjusting to market volatility.

Industry tailwinds should bolster ArcBest's earnings growth and margin expansion in the LTL segment. However, analyst cautions that the company's asset-light division, which typically offers earnings stability, may dampen overall earnings in the coming quarters. The brokerage segment, in particular, is currently facing challenges with volumes and pricing, and is expected to impact gross margins negatively in the early stages of the economic cycle.

Despite these near-term concerns, Stifel's outlook for ArcBest remains positive in the longer term. The brokerage division is anticipated to become a growth driver and contribute positively to net earnings once the market reaches a more stable condition. Analyst concludes that ArcBest's clean balance sheet and cash generation capabilities make its shares very attractive compared to peers in both the LTL and Brokerage sectors.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers
© 2007-2025 - Fusion Media Limited. All Rights Reserved.