ArcBest Corporation (ARCB) is a logistics and transportation company that provides a variety of services to its customers, including expedited freight, less-than-truckload (LTL) services, truckload services, integrated logistics, and ground and air services. The company operates in three segments: Asset-Based, which offers asset-based transportation services; Premium Logistics, which provides integrated logistics solutions; and ABF Logistics, which provides freight brokerage and third-party logistics services. ArcBest trades on the NASDAQ Global Select Market and has a market capitalization of approximately $1.3 billion.
ArcBest has a long history of success and has been providing customers with quality service since 1923. The company has grown rapidly since then and now serves more than 10,000 customers in a variety of industries. Over the past five years, ArcBest has seen a compound annual growth rate (CAGR) of 10.6%, which is an impressive rate of growth. The company also has a strong balance sheetThe balance sheet is a snapshot of a company's financial position at a specific point in time. It shows the company's assets, liabilities, and equity. with a debt-to-equity ratio of 0.4 and a current ratio of 1.4.
Now let’s take a look at ArcBest’s fundamental and technical analysis to determine whether or not it is a good buy.
Fundamental Analysis
The first step in assessing ArcBest is to look at the company’s financials. ArcBest’s revenueThe income statement provides a summary of a company's revenue and expenses over a specified period of time, typically a year or a quarter. It shows the company's total revenue, th... has been increasing steadily over the past few years and is currently at $5.27 billion. The company has also seen an increase in its net income, which is now at $326.4 million. ArcBest’s return on equity (ROE) is an excellent 29.4%, and its profit margin is 5.7%.
ArcBest’s stock price has been trending upwards over the past year and is currently trading at around $100. The company has an awesome price to earnings (P/E) ratio of 6.8, which is well below the industry average of 17.7. ArcBest is also paying a dividend of 0.6%, which is slightly higher than the industry average of 1.2%.
ArcBest price target raised at Cowen
ArcBest’s price target was increased by Cowen analyst Jason Seidl on February 6, 2023, from $124 to $127. According to the analyst, the company anticipates margin pressure in the first half of the year, followed by a recovery in the second half as volumes increase and inflationary pressures in maintenance and purchased transportation normalize.
ArcBest price target raised at Credit Suisse
ArcBest’s price target was increased by Credit Suisse analyst Ariel Rosa to $100 from $90 on February 6, 2023, while maintaining an Outperform rating for the stock. The company acknowledges that it slightly underperformed on Q4 EPS, but the firm emphasizes that LTL OR is still performing well.
ArcBest Announces Fourth Quarter 2022 and Record-Setting Full Year 2022 Results
On February 3, 2023, ArcBest reported Q4 EPS of $2.45 versus the consensus estimate of $2.53. The company reported Q4 revenue of $1.24B versus the consensus estimate of $1.25B. The market was not concerned about the slight misses on EPS and revenue as evidenced by the stock exploding higher.
“I am pleased to report that ArcBest exceeded $5 billion in annual revenue for the first time and delivered the highest annual earnings per share in company history,” said Judy R. McReynolds, ArcBest chairman, president and CEO. “Our fourth quarter and record-breaking full-year 2022 results are directly related to our relentless pursuit of excellence. Despite the challenges in 2022 as a result of ongoing macro trends, the ArcBest team remained focused on serving our customers and advancing our strategic initiatives. We see tremendous opportunity ahead as we celebrate our 100th anniversary in 2023 – an impressive milestone that would not be possible without our dedicated people, who are at the heart of our success. Looking forward, we are confident that our continued investments in ArcBest’s people, our unrivaled network of integrated logistics solutions and innovative mindset will drive continued growth, greater efficiency and value creation for generations to come.”
Technical Analysis
Now let’s take a look at the technicals of ArcBest’s stock. The stock has been in an uptrend since March of 2021 and is currently trading above its 50-day and 200-day moving averages. The stock’s Relative Strength Index (RSI) is currently at 75, which indicates that it is in good shape but is probably overbought short-term. The stock has formed a giant Descending TriangleThe descending triangle pattern is a bearish continuation pattern that is formed when a series of lower highs is followed by a series of equal lows. breakout out chart pattern which is bullish. Finviz is great at spotting these types of patterns over the long-term time frame.
Conclusion
Based on our analysis, ArcBest is a good buy for investors looking for a stock with a long history of success and strong fundamentals. The company has seen increasing revenue and net income, has a healthy balance sheet, and pays a dividend that is slightly higher than the industry average. ArcBest’s stock is also in an uptrend and is trading above its major moving averages, indicating that it is in good shape and is not overbought or oversold. Therefore, we believe that ArcBest is a good buy for investors looking for a solid long-term investment.
