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Comparing C.H. Robinson’s and Peers’ Valuation

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CHRW’s growth projections

C.H. Robinson Worldwide (CHRW) is concentrating on the growth of its transportation and logistics businesses through a combination of organic growth and strategic acquisitions. The company also intends to harness technology to serve customers more effectively. As a result, it expects its NAST (North American Surface Transport) and Global Forwarding segments to grow 5%–10% over the long term, and its Robinson Fresh sourcing business to grow 4%–8%.

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Forward EV-to-EBITDA multiples

EV[1. enterprise value]-to-EBITDA multiples help determine if a company is undervalued or overvalued. Currently, CHRW has a forward EV-to-EBITDA multiple of 13.7x, whereas peers’ multiples are as follows:

  • Expeditors International of Washington (EXPD): 13.3x
  • XPO Logistics (XPO): 10.7x
  • FedEx (FDX): 7.7x
  • United Parcel Service (UPS): 11.2x
  • Old Dominion Freight Line (ODFL): 12.9x

Forward PE multiples

PE multiples determine how many dollars the market is paying for every dollar of a company’s expected EPS over the next 12 months. While CHRW has a forward PE multiple of 19.5x, XPO Logistics has the highest metric in the peer group, of 29.7x. CHRW’s closest comparable peer, EXPD, has a multiple of 22.8x, whereas Old Dominion, FDX, and UPS have forward PE multiples of 23.7x, 13.6x, and 14.6x, respectively. The SPDR S&P Transportation ETF (XTN) has a 2.5% exposure to CHRW.

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