On Wednesday, UBS adjusted its outlook on ArcBest Corp (NASDAQ:ARCB) shares, a transportation and logistics company, by reducing its price target to $126 from the previous $150. The firm has decided to maintain a Neutral rating on the stock.
The adjustment follows a noted decline in the company's shipment trends. ArcBest's shipments per day decreased by approximately 4% year-over-year in February and March, with a further drop to 7% year-over-year in April. Additionally, the weight per shipment has also seen a downward trend, with a 10% year-over-year decrease in February, 14% in March, and 16% year-over-year in April.
UBS estimates that the tonnage per day for ArcBest was around 10,800 in April, while shipments per day were approximately 19,600. These figures represent a 3% decrease from the previous month.
The firm noted that ArcBest's strategic shift away from transactional shipments towards growing its core Less-Than-Truckload (LTL) business has made it challenging to discern the impact of the underlying market on the company's performance.
Despite the overall decline in tons per day, it appears that the core LTL shipments for ArcBest have also softened. This observation comes amid a broader weakening trend in the company's shipment and weight metrics.
InvestingPro Insights
In light of UBS's recent adjustments to ArcBest Corp's (NASDAQ:ARCB) outlook, it's valuable to consider some real-time metrics and insights from InvestingPro. With a market capitalization of approximately $2.6 billion and a P/E ratio of 26.06, which adjusts to 20.37 for the last twelve months as of Q1 2024, ArcBest's financials warrant attention. The company's revenue has experienced a contraction, with a reported -15.58% growth over the last twelve months as of Q1 2024. This aligns with UBS's observations of declining shipment trends.
InvestingPro Tips highlight that ArcBest's stock is currently in oversold territory according to the RSI, which may interest contrarian investors. Additionally, the company has maintained dividend payments for 22 consecutive years, reflecting a commitment to shareholder returns. For investors seeking further insights, there are over 10 additional InvestingPro Tips available, which can be accessed through InvestingPro's platform. Interested readers might consider using the coupon code PRONEWS24 to receive an additional 10% off a yearly or biyearly Pro and Pro+ subscription, granting access to these valuable tips and more.
Moreover, while the company's stock has taken a significant hit over the past week, with a price total return of -19.04%, it's important to note that ArcBest has been profitable over the last twelve months and analysts predict profitability for this year. The company's capacity to generate strong returns over the last five years, coupled with a moderate level of debt, suggests a resilient financial position amidst current market challenges.
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