ArcBest Corp (ARCB) PT Lowered to $73 at BofA Securities

BofA Securities analyst Ken Hoexter lowered the price target on ArcBest Corp (NASDAQ: ARCB) to $73.00 (from $100.00) while maintaining a Underperform rating.

The analyst comments "ArcBest posted its mid-1Q25 update, with quarter-to-date volumes slightly better, yet yields below our forecast. The slight vol beat was led by a better-than previously reported Jan tons/day decline, and a Jan-Feb shift toward transactional/spot business to fill excess capacity. LTL Tons/Day declined 2% year-year in Feb, moderating from -9.2% in Jan (from preliminary -11%), to avg -6% QTD (we were -6%, now -3.4%). Feb LTL allin Rev/Hundredweight (CWT) was flat year-year, to average +4% QTD (we forecast +6%, now +1.8%). Excluding fuel surcharges, Rev/CWT increased in the mid-single digits, and ARCB noted the pricing environment remains rational. However, ARCB sees ongoing softness in the industrial economy, as well as a reduction in heavier-weight LTL shipments and fewer household good moves due to low truckload prices. Weight/Shipment exceeded our forecast, as the carrier ramped transactional (spot) business to fill excess network capacity (10%-15% excess capacity), leading to a higher mix of heavier-weighted truckload freight. Feb LTL Weight/Shipment declined 2%, moderating from -7.6% in Jan to average -5% QTD (we were -6.7%, now -3.2%). LTL Revenue/Day declined 2% y-y in Feb to average -2% QTD (we forecast +0.1%, now - 1.2%). ARCB reiterated its target for 1Q25 LTL Operating Ratio to deteriorate 350-400 bps 4Q to 1Q (we forecast 95.1%, a 360 bps deterioration, from 310 bps worse)."

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