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Here's Why Investors Should Avoid C.H. Robinson (CHRW) Stock Now
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C.H. Robinson Worldwide’s (CHRW - Free Report) top line suffers from lower pricing in ocean and truckload services amid ongoing challenges in a soft freight market. Increased competition, driven by weak demand, high inventories and excess capacity, further affects transportation rates.
Let’s delve deeper.
Southward Earnings Estimate Revision: The Zacks Consensus Estimate for current-quarter earnings has been revised 4.71% downward over the past 60 days. For the current year, the consensus mark for earnings has moved 0.89% south in the same time frame. The unfavorable estimate revisions indicate brokers’ lack of confidence in the stock.
Weak Zacks Rank and Style Score: CHRW currently carries a Zacks Rank #4 (Sell). Moreover, the company’s current Momentum Score of F shows its short-term unattractiveness.
Unimpressive Price Performance: C.H. Robinson has declined 23.3% over the trailing 12 months against its sector’s 20.5% growth.
Image Source: Zacks Investment Research
Other Headwinds: In 2023, C.H. Robinson's fourth-quarter earnings of 50 cents per share missed expectations of 80 cents and declined year over year. Total revenues of $4,221.9 million also fell short of estimates and decreased by 16.7% due to lower pricing in ocean and truckload services. Soft global freight markets, declining Cass Freight Shipments Index and below-par trade from China impacted CHRW’s results.
Moreover, the company’s investment in technology, aimed at long-term growth, may impact its near-term bottom line. Fourth-quarter 2023 capital expenditures were $16.1 million, with anticipated 2024 expenditures between $85 million and $95 million.
Bearish Industry Rank: The industry to which CHRW belongs currently has a Zacks Industry Rank of 238 (250 plus groups). Such an unfavorable rank places it in the bottom 6% of 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.
KEX has an encouraging track record with respect to earnings surprise, having surpassed the Zacks Consensus Estimate in each of the trailing four quarters. The average beat is 5.75%. Increased demand for distribution and services and favorable marine transportation market conditions are bolstering revenues.
The Zacks Consensus Estimate for 2024 earnings has been revised 0.83% upward over the past 60 days. The company has an expected earnings growth rate of 32.80% for 2024. Shares of KEX have rallied 45.1% in the past year.
Air Lease is benefiting from the continuous growth in its fleet and an increase in sales activity. The Zacks Consensus Estimate for AL’s 2024 earnings has improved 25.80% over the past 60 days. Shares of Air Lease have risen 26.1% in the past year.
AL has an expected earnings growth rate of 29.96% for 2024. The company delivered a trailing four-quarter earnings surprise of 20.15%, on average.
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Here's Why Investors Should Avoid C.H. Robinson (CHRW) Stock Now
C.H. Robinson Worldwide’s (CHRW - Free Report) top line suffers from lower pricing in ocean and truckload services amid ongoing challenges in a soft freight market. Increased competition, driven by weak demand, high inventories and excess capacity, further affects transportation rates.
Let’s delve deeper.
Southward Earnings Estimate Revision: The Zacks Consensus Estimate for current-quarter earnings has been revised 4.71% downward over the past 60 days. For the current year, the consensus mark for earnings has moved 0.89% south in the same time frame. The unfavorable estimate revisions indicate brokers’ lack of confidence in the stock.
Weak Zacks Rank and Style Score: CHRW currently carries a Zacks Rank #4 (Sell). Moreover, the company’s current Momentum Score of F shows its short-term unattractiveness.
Unimpressive Price Performance: C.H. Robinson has declined 23.3% over the trailing 12 months against its sector’s 20.5% growth.
Image Source: Zacks Investment Research
Other Headwinds: In 2023, C.H. Robinson's fourth-quarter earnings of 50 cents per share missed expectations of 80 cents and declined year over year. Total revenues of $4,221.9 million also fell short of estimates and decreased by 16.7% due to lower pricing in ocean and truckload services. Soft global freight markets, declining Cass Freight Shipments Index and below-par trade from China impacted CHRW’s results.
Moreover, the company’s investment in technology, aimed at long-term growth, may impact its near-term bottom line. Fourth-quarter 2023 capital expenditures were $16.1 million, with anticipated 2024 expenditures between $85 million and $95 million.
Bearish Industry Rank: The industry to which CHRW belongs currently has a Zacks Industry Rank of 238 (250 plus groups). Such an unfavorable rank places it in the bottom 6% of 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
Investors interested in the broader Transportation sector may consider stocks like Kirby (KEX - Free Report) and Air Lease (AL - Free Report) . Each stock currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
KEX has an encouraging track record with respect to earnings surprise, having surpassed the Zacks Consensus Estimate in each of the trailing four quarters. The average beat is 5.75%. Increased demand for distribution and services and favorable marine transportation market conditions are bolstering revenues.
The Zacks Consensus Estimate for 2024 earnings has been revised 0.83% upward over the past 60 days. The company has an expected earnings growth rate of 32.80% for 2024. Shares of KEX have rallied 45.1% in the past year.
Air Lease is benefiting from the continuous growth in its fleet and an increase in sales activity. The Zacks Consensus Estimate for AL’s 2024 earnings has improved 25.80% over the past 60 days. Shares of Air Lease have risen 26.1% in the past year.
AL has an expected earnings growth rate of 29.96% for 2024. The company delivered a trailing four-quarter earnings surprise of 20.15%, on average.