Earnings Miss: C.H. Robinson Worldwide, Inc. Missed EPS By 18% And Analysts Are Revising Their Forecasts
There's been a notable change in appetite for C.H. Robinson Worldwide, Inc. (NASDAQ:CHRW) shares in the week since its full-year report, with the stock down 15% to US$74.13. Revenues were in line with forecasts, at US$18b, although statutory earnings per share came in 18% below what the analysts expected, at US$2.72 per share. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.
See our latest analysis for C.H. Robinson Worldwide
Following last week's earnings report, C.H. Robinson Worldwide's 21 analysts are forecasting 2024 revenues to be US$17.7b, approximately in line with the last 12 months. Statutory earnings per share are predicted to surge 24% to US$3.45. Before this earnings report, the analysts had been forecasting revenues of US$18.1b and earnings per share (EPS) of US$3.88 in 2024. The analysts seem to have become more bearish following the latest results. While there were no changes to revenue forecasts, there was a real cut to EPS estimates.
The average price target fell 6.2% to US$81.14, with reduced earnings forecasts clearly tied to a lower valuation estimate. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. Currently, the most bullish analyst values C.H. Robinson Worldwide at US$104 per share, while the most bearish prices it at US$60.00. As you can see, analysts are not all in agreement on the stock's future, but the range of estimates is still reasonably narrow, which could suggest that the outcome is not totally unpredictable.
One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. We would highlight that C.H. Robinson Worldwide's revenue growth is expected to slow, with the forecast 0.8% annualised growth rate until the end of 2024 being well below the historical 8.4% p.a. growth over the last five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 4.2% per year. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than C.H. Robinson Worldwide.
The Bottom Line
The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse than the wider industry. Furthermore, the analysts also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.
With that in mind, we wouldn't be too quick to come to a conclusion on C.H. Robinson Worldwide. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple C.H. Robinson Worldwide analysts - going out to 2026, and you can see them free on our platform here.
Before you take the next step you should know about the 2 warning signs for C.H. Robinson Worldwide that we have uncovered.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
