This trucking stock has lagged of late. Citi thinks a rebound is coming

C.H. Robinson Worldwide could be due for a bounce as it shows signs of improving its business, according to Citi. The bank upgraded the transport stock to buy from neutral. It has a $199 price target on shares, implying 25% upside from Thursday’s close. “CHRW has been executing at a high level in recent quarters, with its Lean AI adoption driving efficiency … with its recent sell-off from its February peak offering upside as it moves into our target return range with opportunity for share gains,” analyst Ariel Rosa said in a note to clients. C.H. Robinson has declined roughly 9% over the past three months, with Citi citing higher truckload spot rates pressuring margins. However, the company delivered strong first-quarter earnings results in late April. Its executives also reported signs of margin and efficiency improvements driven by technology adoption, despite the business facing elevated capacity costs, according to Citi. Rosa noted that C.H. Robinson is likely to be weighed down by an unfavorable Supreme Court decision this week. But, the stock should soon bounce back. “The Supreme Court’s ruling against CHRW in the Montgomery case on Thursday is likely to pose a near- term challenge as it adjusts operations, but taken to its logical conclusion, the additional complexity and broker liability associated with the SCOTUS decision appears likely to advantage (1) asset-based carriers, and (2) large brokers over small brokers, continuing to drive marginal carriers and brokers out of the industry,” Rosa wrote. Citi’s call falls in line with consensus on Wall Street. Of the 25 analysts covering C.H. Robinson Worldwide, 15 have a buy or strong buy on the stock, LSEG data shows.