ArcBest’s Mixed Performance and Cautious Outlook Lead to Hold Rating Amid Competitive Pressures

TD Cowen analyst Jason Seidl reiterated a Hold rating on ArcBest (ARCB – Research Report) today and set a price target of $72.00.

Jason Seidl’s rating is based on a combination of factors that reflect both positive and negative aspects of ArcBest’s current performance and outlook. The company’s first-quarter results were better than anticipated, yet there are concerns about future performance, particularly with the potential risk to asset-based guidance if normal seasonality does not play out as expected in the second quarter. This cautious outlook is reflected in the lowered price target from $80 to $72, indicating a more conservative stance on the stock’s potential appreciation.
Despite some positive developments, such as an increase in contract renewals and the use of dynamic pricing tools, ArcBest faces challenges with declining tonnage and revenue per hundredweight. Additionally, while asset-light results exceeded expectations, this division is projected to incur losses in the next quarter. These mixed signals, along with the ongoing struggles of the MoLo acquisition to achieve profitability, contribute to the Hold rating, as the company navigates through a period of industrial softness and competitive pressures.

Based on the recent corporate insider activity of 54 insiders, corporate insider sentiment is positive on the stock. This means that over the past quarter there has been an increase of insiders buying their shares of ARCB in relation to earlier this year.