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C.H. Robinson has a tricky highway forward in 2023, in keeping with JPMorgan. Analyst Brian Ossenbeck downgraded the inventory to underweight from impartial. The analyst named rail congestion charges, truckload fee cycles and coal volumes as headwinds for the corporate in 2023 regardless of an enhancing business outlook. “C.H. Robinson’s major North American Floor Transportation section stays considerably uncovered to the unfold between contract and spot truckload charges in addition to the timing of contract negotiations and general freight market demand,” the analyst mentioned in a Friday notice. The downgrade got here after C.H. Robinson reported its newest quarterly outcomes earlier this month. Each the corporate’s earnings and income got here in effectively under expectations. The analyst famous that C.H. Robinson is extra uncovered to broader business and macro dangers than a few of its rivals, notably RXO. “RXO was capable of develop brokerage quantity by 4% YoY throughout 4Q22 and expects to point out development once more in 1Q23 on a YoY foundation whereas Robinson’s truckload quantity development has underperformed its typical Cass Freight benchmark over the last two quarters,” the analyst mentioned. The inventory has jumped 13.3% in 2023 after falling greater than 14% final yr. Nonetheless, JPMorgan thinks that there are nonetheless vital draw back dangers to the inventory regardless of its current beneficial properties. Ossenbeck reiterated his value goal of $87, which means a 16.1% draw back from the inventory’s closing value on Thursday. “There wasn’t a lot to write down house about after the 4Q22 earnings name after administration signaled the present technique would keep the course and never put the World Forwarding enterprise up on the market any time quickly even after the previous CEO (who opposed the sale) was fired firstly of 2023,” mentioned Ossenbeck. —CNBC’s Michael Bloom contributed to this report.
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