Benchmark analyst Christopher Kuhn reiterated a Buy rating on C.H. Robinson Worldwide, Inc. (NASDAQ:CHRW), lowering the price target to $100 from $108 given a recovery in the freight market will likely be pushed out to 2024.

The analyst cautioned that CHRW is operating in a very challenging freight environment, which will likely delay the company's margin improvement goals after volume demand returns.

Continued low load-to-truck ratios, low routing guide depth, and a continued push out of a recovery in CHRW forecasted van cost per mile would limit opportunities for price increases in the short term, Kuhn adds.

The analyst notes that the company wants to decouple volume growth from headcount growth to increase the business' scalability by reducing waste.

To improve, CHRW needs to enable tasks that are done quicker and more efficiently since the analyst believes the company is behind RXO, Inc. (NYSE:RXO) in that regard.

The focus will be reducing error states, increasing the order to cash cycle, and decreasing time to task and manual tasks per shipment, Kuhn adds.

While CHRW is confident it can achieve the 15% productivity goal this year and continue beyond that, given the continued streamlining of processes, the analyst thinks that the company has to wait till the freight market improves to gauge the success of these initiatives.

Kuhn flagged that the company still uses several manual processes to serve customers despite the increased tech spending.

For example, track and trace systems can be more automated, and there should be more self-service functions for customers to access information easily and quickly without a call or e-mail, the analyst notes.

The analyst lowered FY23 EPS estimates to $3.61 from $3.66, with revenue at $17.912 billion.

For FY24, the analyst raised the EPS estimate to $4.13 from $4.12, increasing the revenue estimate to $18.239 billion from $18.226 billion. 

Price Action: CHRW shares are trading higher by 0.34% to $87.28 on the last check Wednesday.