Wells Fargo has adjusted its outlook on ArcBest Corp, raising the firm's price target to $85.00 from $74.00 while retaining an Equal Weight recommendation. The new target remains below ArcBest's prevailing market price of $90.22 and under the InvestingPro Fair Value assessment, signaling that Wells Fargo's view implies the shares may be modestly overvalued despite recent momentum.
The upgrade in the price target stems from what the research team describes as improved trends in Asset-Based volume and margins. In its update, Wells Fargo increased its estimate for the first quarter of fiscal 2026 to $0.16 per share, up from a prior forecast of negative $0.09. The firm also nudged full-year earnings projections higher for both 2026 and 2027 to $4.30 and $6.90 respectively, versus prior forecasts of $4.00 and $6.50. Those revisions reflect the analyst's assessment of stronger volumes and somewhat better profitability in ArcBest's Asset Light operations.
Wells Fargo framed the valuation change as a recalibration of "the balance of volume, yield and OR" within its model for the transportation and logistics company. The updated price target represents roughly a 15% increase versus the prior target and is derived using a multiple of about 12.5 times the firm's revised 2027 earnings estimate. By comparison, ArcBest's current price-to-earnings ratio sits at 34.4, indicating that Wells Fargo's multiple is materially more conservative than the stock's market valuation.
ArcBest has recorded notable share-price gains recently, with a 29.1% return over the past six months and a 21.6% return year-to-date, according to InvestingPro data cited in the research note. Those gains reflect favorable operational momentum even as analyst views on appropriate valuation multiples diverge.
Separately, ArcBest released fourth-quarter 2025 results that were mixed. Adjusted earnings per share of $0.36 missed the consensus expectation of $0.42, while revenue came in at $973 million, slightly ahead of the $968.1 million that analysts had forecast. Following the quarterly report, Jefferies raised its price target on ArcBest to $110 from $95 and maintained a Buy rating, highlighting the company's strong Asset-Based operating ratio in the quarter and expressing satisfaction with both the results and the first-quarter outlook.
These developments leave a split picture: revenue showed modest strength and operating-ratio performance drew positive attention from some brokers, yet the EPS shortfall and the contrasting price-target levels underscore differing views on near-term earnings conversion and longer-term valuation. The stock experienced a pullback after the earnings release, reflecting investor focus on the EPS miss despite revenue outperformance and subsequent analyst support from Jefferies.
Context for investors
- Wells Fargo's target increase is driven by improved Asset-Based volume and margin trends, and adjustments to the Asset Light profitability assumptions.
- The firm's revised estimates raise Q1 2026 EPS to $0.16 from -$0.09 and lift full-year 2026 and 2027 forecasts to $4.30 and $6.90 respectively.
- Valuation applied by Wells Fargo - about 12.5x 2027 earnings - is conservative relative to ArcBest's current P/E of 34.4.
This update highlights contrasting analyst perspectives on ArcBest's trajectory: improvement in volumes and margins that supports higher earnings estimates, balanced against valuation caution from Wells Fargo and bullish positioning from Jefferies following operational strength in the quarter.