Why BofA Upgrades CH Robinson Worldwide

Brokerage carriers such as CH Robinson Worldwide Inc CHRW are poised to benefit from continued strength in contract rates in the first half of 2022 and the subsequent “roll over as fluidity improves in the supply chain,” according to BofA Securities.

The CH Robinson Worldwide Analyst: Ken Hoexter upgraded the rating for CH Robinson Worldwide from Neutral to Buy, while raising the price target from $108 to $125.

The CH Robinson Worldwide Thesis: Contractual pricing is likely to increase from March through May 2022, given the current elevated spot rates, Hoexter said in the upgrade note.

“The company recently posted its first widening of spreads (rates it receives vs. rates it pays to truckers) since 2Q19, and its global forwarding segment remains robust given the tight supply market and sustained pricing environment,” the analyst wrote.

“CHRW benefits from a large brokerage operation with its scale benefits, and its automation adoption, while new digital brokerage entrants work to erode its leadership position,” he added.

CHRW Price Action: Shares of CH Robinson are down 0.57% $106.90 at the time of publication Thursday.

Photograph by DEZALB from Pixabay