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Here's Why Investors Should Avoid C.H. Robinson (CHRW) Now
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C.H. Robinson Worldwide, Inc. (CHRW - Free Report) is currently mired in multiple headwinds, which we believe, have made it an unimpressive investment option.
Let’s delve deeper.
Southward Earnings Estimate Revisions: The Zacks Consensus Estimate for current-quarter earnings has been revised 5.7% downward over the past 60 days. For the current year, the consensus mark for earnings has moved 2.7% south in the same time frame. The unfavorable estimate revisions indicate brokers’ lack of confidence in the stock.
Weak Zacks Rank and Style Score: C.H. Robinson currently carries a Zacks Rank #5 (Strong Sell). Moreover, the company’s current Value Style Score of C shows its unattractiveness.
Unimpressive Price Performance: CHRW has declined 12.8% over the past year against its industry’s 16.7% growth.
Image Source: Zacks Investment Research
Other Headwinds: C.H. Robinson's second-quarter 2023 total revenues of $4421.9 million lagged the Zacks Consensus Estimate of $4646.5 million and plunged 35% year over year owing to lower pricing in the company’s ocean and truckload services. Also, quarterly earnings of 90 cents per share dipped 66.2% year over year.
Quarterly results were impacted by soft freight markets globally. Weak demand, high inventories and excess capacity led to a more competitive marketplace and subdued transportation rates.
Adjusted gross profit fell 35.5% year over year to $665.5 million in second-quarter 2023 due to lower adjusted gross profit per transaction in truckload and ocean. Adjusted operating margin of 19.9% contracted 2,560 basis points.
Bearish Industry Rank: The industry, to which CHRW belongs, currently has a Zacks Industry Rank of 235 (of 250 plus groups). Such an unfavorable rank places CHRW in the bottom 6% of the Zacks industries. Studies show that 50% of a stock price movement is directly related to the performance of the industry group it belongs to.
A mediocre stock within a strong group is likely to outclass a robust stock in a weak industry. Therefore, reckoning the industry’s performance becomes imperative.
Stocks to Consider
Some better-ranked stocks for investors interested in the Zacks Transportation sector are FedEx Corporation (FDX - Free Report) and Ryder System (R - Free Report) .
FDX’s consistent efforts to reward shareholders through dividends and buybacks are encouraging. It presently carries a Zacks Rank #2 (Buy).
FedEx's liquidity position is also impressive. To navigate the weaker-than-expected business environment, FDX is cutting costs.
Ryder, which currently sports a Zacks Rank #1 (Strong Buy), is benefiting from its consistent efforts to reward shareholders through dividends and share repurchases. You can see the complete list of today’s Zacks #1 Rank stocks here.
Despite weak market conditions, Ryder reported better-than-expected earnings in second-quarter 2023. The company has an impressive earnings surprise history. R has surpassed the Zacks Consensus Estimate in three of the last four quarters (missing the mark once), the average beat being 11.2%.
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Here's Why Investors Should Avoid C.H. Robinson (CHRW) Now
C.H. Robinson Worldwide, Inc. (CHRW - Free Report) is currently mired in multiple headwinds, which we believe, have made it an unimpressive investment option.
Let’s delve deeper.
Southward Earnings Estimate Revisions: The Zacks Consensus Estimate for current-quarter earnings has been revised 5.7% downward over the past 60 days. For the current year, the consensus mark for earnings has moved 2.7% south in the same time frame. The unfavorable estimate revisions indicate brokers’ lack of confidence in the stock.
Weak Zacks Rank and Style Score: C.H. Robinson currently carries a Zacks Rank #5 (Strong Sell). Moreover, the company’s current Value Style Score of C shows its unattractiveness.
Unimpressive Price Performance: CHRW has declined 12.8% over the past year against its industry’s 16.7% growth.
Image Source: Zacks Investment Research
Other Headwinds: C.H. Robinson's second-quarter 2023 total revenues of $4421.9 million lagged the Zacks Consensus Estimate of $4646.5 million and plunged 35% year over year owing to lower pricing in the company’s ocean and truckload services. Also, quarterly earnings of 90 cents per share dipped 66.2% year over year.
Quarterly results were impacted by soft freight markets globally. Weak demand, high inventories and excess capacity led to a more competitive marketplace and subdued transportation rates.
Adjusted gross profit fell 35.5% year over year to $665.5 million in second-quarter 2023 due to lower adjusted gross profit per transaction in truckload and ocean. Adjusted operating margin of 19.9% contracted 2,560 basis points.
Bearish Industry Rank: The industry, to which CHRW belongs, currently has a Zacks Industry Rank of 235 (of 250 plus groups). Such an unfavorable rank places CHRW in the bottom 6% of the Zacks industries. Studies show that 50% of a stock price movement is directly related to the performance of the industry group it belongs to.
A mediocre stock within a strong group is likely to outclass a robust stock in a weak industry. Therefore, reckoning the industry’s performance becomes imperative.
Stocks to Consider
Some better-ranked stocks for investors interested in the Zacks Transportation sector are FedEx Corporation (FDX - Free Report) and Ryder System (R - Free Report) .
FDX’s consistent efforts to reward shareholders through dividends and buybacks are encouraging. It presently carries a Zacks Rank #2 (Buy).
FedEx's liquidity position is also impressive. To navigate the weaker-than-expected business environment, FDX is cutting costs.
Ryder, which currently sports a Zacks Rank #1 (Strong Buy), is benefiting from its consistent efforts to reward shareholders through dividends and share repurchases. You can see the complete list of today’s Zacks #1 Rank stocks here.
Despite weak market conditions, Ryder reported better-than-expected earnings in second-quarter 2023. The company has an impressive earnings surprise history. R has surpassed the Zacks Consensus Estimate in three of the last four quarters (missing the mark once), the average beat being 11.2%.