Goldman Sachs downgraded shares of C.H. Robinson Worldwide ( NASDAQ: CHRW ) to Neutral from a prior Buy on Tuesday.
The downgrade was due to what the bank’s analysts termed a “more tempered outlook in the brokerage sector” over the next few quarters. As such, a downgrade and trimmed EPS forecasts for the period through 2024 is appropriate, in the team’s view.
“As contractual selling prices are reset and converge closer to the drop in purchased transport costs over the next 1-3 quarters, this would flatten out the net revenue margin expansion opportunity,” the downgrade explained. Typically brokers do best on inflections – a more steady state environment in conjunction with likely volume declines could lead to pressured net revenue growth, and EBIT margin as percent of net revenue – a situation that historically leads to less opportunity for upside share price potential.”
The team trimmed their price target to $93 from $102 alongside the rating reassessment.
Read more on the company’s search for a new permanent CEO .
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Goldman steps to sidelines on CH Robinson