C.H. Robinson Worldwide ( NASDAQ: CHRW ) stock slipped in pre-market trading as Stifel stepped away from its previously bullish rating on the stock.
Prompted by a significant miss on earnings estimates on Wednesday, the firm’s analysts noted that elevated costs coupled with a deeper than expected drop in volumes has made their Buy thesis untenable. In particular, Forwarding was highlighted as a segment facing major issues.
“The cost structure in Forwarding remains upside down, in our view, and will take some time to correct. We believe the foundation at Robinson is strong, and we're bullish on the long term growth opportunity for the brokerage industry,” the downgrade note concluded. “The board has enacted a major leadership change, but given the current backdrop and until we get a more concrete strategy for earnings growth, we'll choose to step to the sidelines.”
The firm’s price target came down to $99 from $107 alongside the downgrade to Hold from Buy. Shares of CH Robinson ( CHRW ) fell 1.09% in premarket trading on Friday.
Read more on the details of the earnings miss .
For further details see:
C.H. Robinson cut to Hold as Stifel sizes up ‘sizable miss’ on earnings