C.H. Robinson Worldwide, Inc.
Thesis
C.H. Robinson is facing significant challenges from online travel platforms that are reducing demand for its services. The company's valuation is expected to compress as it misses consensus estimates, with projected EPS declining due to decreasing NAST spreads. A target price of $70 is set based on a 16x multiple applied to the estimated 2019 EPS of $4.31.
Did it work?
The short thesis on C.H. Robinson has played out significantly, with the stock price declining by 57.3% since the pitch. The anticipated challenges from online platforms and the decline in EPS have materialized, leading to a valuation compression that aligns with the thesis. The target price of $70 appears to have been validated by the substantial drop in the stock price.
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