Stifel analyst J. Bruce Chan reiterates a Buy rating on ArcBest Corporation (NASDAQ:ARCB), raising the price target to $134 from $125.

ArcBest is likely to gain from the influx of freight from the liquidation of industry peer Yellow Corporation (NASDAQ:YELL), which looks imminent.

ARCB recently reported Q2 results, which were well below the Street consensus.

Results in ABF—the company's Less-than-Truckload (LTL) unit—were the primary culprit, even though revenue was roughly in-line. The analyst notes that profitability was meaningfully lower, with a 280bp worse margin than expected.

However, ArcBest recently employed a "dynamic pricing" freight strategy, onboarding lower-yield spot freight to preserve capacity ahead of an eventual recovery.

LTL industry tailwinds should help earnings growth and margin expansion for ARCB, the analyst notes.

In fact, ARCB shares look attractive relative to peers for a company that generates cash.

Chan tempered the company's EPS assumptions for 2023 and 2024 from $7.70 and $10.00 to $6.40 and $9.60, respectively, with some of the upside being baked into the multiple until Yellow's fate becomes official.

Related: What In The World Is Going On With Yellow Corp (YELL) Stock?

Price Action: ARCB shares are trading higher by 0.85% to $117.31 on the last check Tuesday.