BMO Capital Markets on Tuesday upgraded C.H. Robinson Worldwide to an outperform rating from market perform, and raised its price target on the stock to $72 from $70. In a note to clients, BMO analyst Fadi Chamoun cited three reasons for the upgrade: attractive valuation relative to peers, depressed earnings reflecting cyclical pressures. and capital allocation supportive of attractive distribution to shareholders and M&A.
Chamoun said “We believe CH Robinson is one of the best-managed transportation/logistics companies in North
America with a very strong record of successful execution, cash flow generation and more importantly, capital deployment.” “We have remained on the sidelines not recommending the stock since early 2016 as the cyclical pressure from excess trucking capacity started to weigh on the company’s margin. However, with truck fleet utilization rising and demand/capacity tightening we think the pressure on cyclical truckload margin is in the rear view mirror,” he added.