UPDATE: BB&T Capital Downgrades C.H. Robinson Worldwide (CHRW) to Hold

(Updated - April 27, 2016 8:25 AM EDT)

BB&T Capital downgraded C.H. Robinson Worldwide (NASDAQ: CHRW) from Buy to Hold and removed its price target (prior $81.00). Analyst Thomas S. Albrecht sees limited upside.

"From a fundamental perspective, our downgrade reflects a belief that margins have peaked for the near-term (next 3 to 4 quarters?) and that capacity will begin a gradual (albeit not yet visible) process of tightening in 2H'16. And while CHRW's TL volume growth may accelerate due to the proliferation of shipper bids and our sense that CHRW won a fair amount of new business, this is likely to be at lower margins than the 19.7% (or even below 19%) net margin CHRW experienced in Q1'16," said Albrecht.

"The operating environment remains optimal for freight brokers, but that same environment is pressuring asset-based carriers' operating metrics and profits. Combined with the ELD mandate, we expect to see more visible evidence of carrier failures by mid-summer, especially as lower pricing from shippers takes hold. Symbolically, when capacity begins to tighten CHRW's stock can under perform for a couple of quarters until they have re-priced about half of their revenues," added the analyst.

For an analyst ratings summary and ratings history on C.H. Robinson Worldwide click here. For more ratings news on C.H. Robinson Worldwide click here.

Shares of C.H. Robinson Worldwide closed at $75.71 yesterday.

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