On Tuesday, Citi adjusted its stance on ArcBest Corp (NASDAQ: NASDAQ:ARCB), lowering the price target to $118 from $127 while maintaining a Neutral rating on the stock. The transportation company's mid-quarter update revealed a year-over-year decrease in tonnage per day for November by 6%, which was a slight improvement from the 8.7% decline observed in October. This comparison takes into account the temporary boost in volume and pricing ArcBest experienced in the previous year due to the Estes cyberattack incident.
The November figures also showed that weight per shipment continued to decline by 6% year-over-year, consistent with October's 5.9% decrease. Following the pre-market session where ArcBest shares fell by 3.5%, the stock partially recovered to a 1% decline by mid-morning. Citi's commentary on the update highlighted that the results, although showing some improvement, indicate persistent softness in freight demand and increased competition from other carriers.
Despite these challenges, the less-than-truckload (LTL) industry's pricing remains relatively strong. November's revenue per hundredweight saw a modest year-over-year decrease of 1%, an improvement from the 2.7% drop in October, even with declining fuel prices. In light of these mixed indicators, Citi has revised its fourth-quarter 2024 adjusted earnings per share (EPS) estimate for ArcBest to $1.20, down from the previous forecast of $1.29, to reflect the softer demand conditions.
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