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JPMorgan downgraded three stocks in the transportation and logistics sector on Tuesday. The firm warned of operational challenges in the sector or a slower than expected market recovery, which led it to take an overall more cautious stance for the near term.
“The recent demand strength could also be viewed with some skepticism in light of factors such as the U.S. elections and tariff risk along with potential labor disruptions in Canada and the U.S. East Coast. Additionally, we see an underappreciated headwind from truckers still driving fewer miles than they did prior to Covid-19,” updated analyst Brian Ossenbeck.
ArcBest (NASDAQ:ARCB) was dropped to a Neutral from Overweigt. The December 2024 price target was lowered to $127 from $145 based on reduced 2025 adjusted EBITDA estimates and a target multiple of 6.8X, down from 7.2X. Shares of ArcBest (ARCB) slipped 1.58% in premarket trading.
Heartland Express (NASDAQ:HTLD) was lowered to an Underweight rating from Neutral. The December 2024 price target moved down to $10 from $12 on lowered 2025 EPS estimates with the same 19X multiple. Shares of HTLD fell 7.79% in premarket trading.
Werner Enteprises (NASDAQ:WERN) was slashed to an Underweight rating from Neutral. The December 2024 PT moves down to $32 from $36 on lowered 2025 EPS estimates with the same 18x multiple. Shares of WERN slid 7.25% premarket.
On the positive side, C.H. Robinson Worldwide (NASDAQ:CHRW) was upgraded to a Neutral rating from Underweight. The company is expected to benefit from a modest amount of industry consolidation as freight tech startups have been sold, repurposed, or otherwise shut down. The December 2024 price target was reduced to $87 from $76 reflecting a 19X (up from 17.5x) multiple applied to the raised 2025 EPS forecast. Shares of C.H. Robinson (CHRW) edged 0.45% higher premarket.
Looking for some sector standouts? The only ground transportation stocks with a Seeking Alpha Quant Buy rating are Universal Logistics Holdings (ULH), Full truck Alliance (YMM), Ryder Systems (R), XPO (XPO), and RXO (RXO).