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. It was not a great result overall. While revenues of US$18b were in line with analyst predictions, earnings were less than expected, missing statutory estimates by 18% to hit US$2.72 per share. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

Check out 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. Per-share earnings are expected to bounce 24% to US$3.45. Yet prior to the latest earnings, the analysts had been anticipated 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 substantial drop in EPS estimates.

It might be a surprise to learn that the consensus price target fell 6.2% to US$81.14, with the analysts clearly linking lower forecast earnings to the performance of the stock price. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. 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. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the C.H. Robinson Worldwide's past performance and to peers in the same industry. 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 biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for C.H. Robinson Worldwide. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that C.H. Robinson Worldwide's revenue is expected to perform worse than the wider industry. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of C.H. Robinson Worldwide's future valuation.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have forecasts for C.H. Robinson Worldwide 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.