Both XPO ( NYSE: XPO ) and C.H. Robinson Worldwide ( NASDAQ: CHRW ) are likely to see earnings deteriorate in 2023, according to JP Morgan.
The bank’s analysts warned that 2023 guidance is “light on details, heavy on uncertainty” with recessions risks looming over the logistics space. With warnings from FedEx ( FDX ) freight flowing through in December, the team warned that pain across the space is likely to continue into January and February earnings reports.
“We expect XPO will miss 2023 expectations as rising interest rates weigh on earnings and LTL faces a freight market less supportive for an operational turnaround,” the team advised.
For C.H. Robinson ( CHRW ), outperformance in the past year that has raised expectations and an ongoing search for a new CEO leave the stock at risk. As such, both stocks were named “ones to avoid” and downgraded to Neutral from Buy.
Read more on Goldman’s recent downgrade of CH Robinson .
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XPO, C.H. Robinson downgraded as JP Morgan sees ‘challenging’ 2023