BofA has adjusted its price target for ArcBest (ARCB, Financial), lowering it from $67 to $63 while maintaining an Underperform rating. This decision follows the company's mid-Q2 update, which showed improved volume numbers but yields that fell short of the firm's expectations.
Despite raising its earnings per share forecasts for fiscal years 2025 and 2026 by 4% and 2% to $5.80 and $8.15 respectively, the firm remains cautious. It highlights ongoing pricing challenges and a strategic shift towards lower-margin transactional freight as potential concerns, influencing their updated target multiple to align with the midpoint of the past five years.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 11 analysts, the average target price for ArcBest Corp (ARCB, Financial) is $81.82 with a high estimate of $140.00 and a low estimate of $60.00. The average target implies an upside of 24.70% from the current price of $65.61. More detailed estimate data can be found on the ArcBest Corp (ARCB) Forecast page.
Based on the consensus recommendation from 13 brokerage firms, ArcBest Corp's (ARCB, Financial) average brokerage recommendation is currently 2.4, indicating "Outperform" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for ArcBest Corp (ARCB, Financial) in one year is $96.70, suggesting a upside of 47.39% from the current price of $65.61. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the ArcBest Corp (ARCB) Summary page.
ARCB Key Business Developments
Release Date: April 29, 2025
- Consolidated Revenue: Decreased by 7% to $967 million.
- Non-GAAP Operating Income: $17 million, down from $43 million in the prior year.
- Adjusted Earnings Per Share: $0.51, down from $1.34 in Q1 2024.
- Asset Based Revenue: $646 million, a per day decrease of 3%.
- Asset Based Operating Ratio: 95.9%, increased by 390 basis points year-over-year.
- Daily Shipments: Flat year-over-year, with a 4% decrease in weight per shipment.
- Revenue Per Hundredweight: Increased by 2% year-over-year.
- Asset Light Revenue: $356 million, a daily decrease of 9% year-over-year.
- Asset Light Non-GAAP Operating Loss: $1.2 million, improved from a $4.7 million loss last year.
- Capital Expenditure Guidance: $225 million to $275 million for 2025.
- Available Liquidity: Approximately $350 million.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- ArcBest Corp (ARCB, Financial) has made significant progress in boosting operational efficiency and eliminating unnecessary costs, positioning the company to adapt effectively to dynamic market conditions.
- The company has seen a 31% improvement in the speed of deal execution due to addressing workflow bottlenecks and streamlining processes.
- ArcBest Corp (ARCB) has achieved double-digit growth in its managed transportation solution, reaching all-time quarterly highs for both shipments and revenue.
- The company has successfully increased its sales pipeline with a higher mix of core LTL opportunities, investing in sales teams to grow its share of small and medium-sized businesses.
- ArcBest Corp (ARCB) has introduced innovative solutions like Box Vision, enhancing transparency and compliance in freight handling workflows, and expects it to be a cost-effective solution.
Negative Points
- Consolidated revenue decreased by 7% from the previous year's first quarter, with non-GAAP operating income from continuing operations dropping significantly.
- The Asset Based segment saw a $27 million decrease in operating income, and the Asset Light segment reported a non-GAAP operating loss.
- Adjusted earnings per share fell to $0.51 from $1.34 in the first quarter of 2024, indicating a decline in profitability.
- The company experienced a 4% decrease in weight per shipment, resulting in a 4% decrease in tons per day compared to the previous year.
- Revenue per hundredweight decreased by 2% in April 2025, partly driven by an increase in shipments from core customers with easier-to-handle freight, which generally have a lower revenue per hundredweight profile.
