C.H. Robinson Worldwide Holdings ( NASDAQ: CHRW ) stock slid in premarket action on Wednesday after UBS cut its rating to Sell from Neutral.
Equity analyst Thomas Wadewitz explained that he sees a sharper drop in revenue and earnings per share than the analyst consensus recognizes at present. He noted that the confluence of “dramatically lower ocean shipping rates” and a drop in truckload contract rates leaves his estimates well below the Street consensus.
“While CHRW has a cost-reduction program, we believe the net cost savings are likely to be modest relative to the size of reduction in revenue CHRW is facing in 2023,” Wadewitz said. “We expect downside EPS to translate into a move down in CHRW stock.”
Alongside the downgrade to Sell, Wadewitz cut his price target to $81 from a prior $90. Shares of the Minnesota-based trucking company fell 2.25% on Wednesday.
Wadewitz advised that the rating change and price target trimming was the result of new earnings forecasts and not the sudden CEO shift announced on Tuesday .
“We expect downside EPS to drive pressure on CHRW,” he clarified. “The news of a CEO change is not a primary factor, in our view, as it could point to risk but also facilitate change.”
The UBS view on the leadership change contrasts sharply with that of Bank of America .
For further details see:
C.H. Robinson stock drives lower as UBS cuts to Sell