ArcBest: Stay Bullish That ARCB Can Hit Its EPS Guide
Summarize this article with:
Eleceed Capital596 FollowersFollow5ShareSavePlay(8min)CommentsSummaryArcBest Corp. (ARCB) remains a Buy as fundamental drivers for the 2028 EPS target are intact, with recent volume inflection reinforcing earnings growth potential. November's 3% y/y tonnage and shipment growth, despite weak PMI, suggests ARCB is gaining market share and leveraging its fixed-cost model for earnings upside. Pricing discipline persists, with Q3 contract renewals up 4.5%, and Managed Solutions' integrated, sticky business model delivers recurring, high-quality revenue growth. Valuation remains compelling; if ARCB achieves $13.5–$15 EPS, a peer multiple implies significant upside from the current 14x NTM PE. sergei scherbak/iStock via Getty Images Summary I gave a buy rating to ArcBest Corp. (ARCB) as I believed it can achieve its 2028 adj. EPS guidance given the fundamental drivers. I maintain my buy rating because the drivers behindThis article was written byEleceed Capital596 FollowersFollowI'm a passionate investor with a strong foundation in fundamental analysis and a keen eye for identifying undervalued companies with long-term growth potential. My investment approach is a blend of value investing principles and a focus on long-term growth. I believe in buying quality companies at a discount to their intrinsic value and holding them for the long haul, allowing them to compound their earnings and shareholder returns.Analyst’s Disclosure:I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.Quick InsightsHow does ARCB’s November volume growth affect the earnings outlook?The 3% y/y tonnage and shipment growth in November, if sustained, adds incremental earnings upside due to ARCB’s high fixed-cost leverage, supporting confidence in achieving 2028 EPS targets.What supports ARCB’s pricing power despite yield per hundredweight declines?Q3 contract renewals averaged 4.5% increases, indicating rational pricing and customer willingness to pay more, while yield declines are attributed to mix shifts, not underlying pricing weakness.How does the Managed Solutions segment impact ARCB’s valuation and business quality?Managed Solutions delivers sticky, recurring revenue by deeply integrating with customer logistics, enhancing revenue quality and predictability, which supports a higher valuation multiple if growth persists.Recommended For You