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Investing.com - Stifel has reiterated its Buy rating on ArcBest Corp (NASDAQ:ARCB) while maintaining its $81.00 price target, citing the company’s potential in the Less-than-Truckload (LTL) sector. According to InvestingPro data, ArcBest trades at an attractive P/E ratio of 10.2x and has maintained dividend payments for 23 consecutive years.
In its analysis, Stifel acknowledged that ArcBest has faced a "union-based valuation discount" compared to its peers, partly due to its approximately 30% higher labor cost structure. However, the firm believes this discount is partially unwarranted, particularly given the company’s solid financial health metrics and moderate debt levels.
Stifel distinguished ArcBest from the now-defunct Yellow Corporation, highlighting ArcBest’s young fleet, excellent service metrics, and clean balance sheet—three areas where Yellow ultimately failed.
The research firm described ArcBest as an "under-appreciated opportunity" in the market, noting that the company’s recently announced mid-term targets make the investment case "even clearer, even if the timing is not."
Stifel expressed approval of presentations at ArcBest’s recent investor day, reinforcing its positive outlook on the transportation company despite challenges related to its labor structure.
In other recent news, ArcBest has announced its 2028 financial targets during an investor day event, aiming for a non-GAAP diluted earnings per share of $12 to $15 and operating cash flow of $400 to $500 million. The company also increased its share repurchase authorization to $125 million, allowing for flexibility in stock repurchases based on market conditions. In its second-quarter earnings report, ArcBest reported earnings per share of $1.36, falling short of both analyst expectations and consensus estimates. UBS, Stifel, and BofA Securities have all lowered their price targets for ArcBest, citing mixed quarterly results and weaknesses in certain segments. UBS set its new price target at $73, while maintaining a Neutral rating. Stifel adjusted its target to $81, keeping a Buy rating, and BofA revised its target to $78, also maintaining a Neutral rating. Despite the earnings miss, ArcBest’s tonnage per day increased by 4.3% year-over-year, aligning with some analyst projections.
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