UPDATE: J.P. Morgan Upgrades C.H. Robinson Worldwide to Neutral, Raises PT

In a report published Monday, J.P. Morgan & Co. upgraded its rating on C.H. Robinson Worldwide CHRW from Underweight to Neutral, and raised its price target from $56.00 to $65.00. J.P. Morgan noted, “CHRW stock has significantly underperformed the broader market in 2011 and 2012TD due to a combination of cyclical and secular pressures which resulted in both soft EPS performance and downward pressure on valuation. We believe that cyclical pressures eased in 3Q and CHRW stock also appears to discount at least a portion of the secular pressures on this name. As a result, we believe that near term reward to risk is more balanced and we are raising our rating to Neural from Underweight. Given what remains negative sentiment on CHRW stock and our anticipation of a more constructive 3Q EPS report (compared to the past several quarters) we believe that risk is probably skewed to the upside going into CHRW's 3Q earnings report. We continue to believe that due to a number of secular pressures (increased brokerage market competition and static TL market capacity), CHRW is unlikely to deliver the same pace of growth it has in the past. As a result we believe it is reasonable to consider valuation for CHRW in the mid to high teens P/E range. Nevertheless, reward to risk appears more balanced than it has been over the past two years and as a result we now rate CHRW Neutral.” C.H. Robinson Worldwide closed on Friday at $60.31.