NEW YORK (TheStreet) -- Shares of Hub Group Inc (HUBG) are tanking 7.50% to $40.06 after the trucking company was downgraded to "market perform" from "strong buy" at Raymond James (RJF) this morning, following its outlook update in an 8-K filing regarding complaints filed on behalf of a class comprised of present and former employees.
Analysts at the firm removed its $59 price target.
Hub Group decided today to make settlement offers to individual drivers, amounting to a total of approximately $9.5 million in connection with its two complaints. In addition, the company expects to pay $1 million in legal and travel costs related to the settlements.
One complaint was filed against Hub Group who allegedly misclassified a group of former California-based truck drivers as independent contractors instead of employees.
A second complaint alleging similar claims was filed on July 24, but the company believes the truck drivers were properly classified.
Separately, TheStreet Ratings team rates HUB GROUP INC as a Buy with a ratings score of A-. TheStreet Ratings Team has this to say about their recommendation:
"We rate HUB GROUP INC (HUBG) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, good cash flow from operations, increase in net income and growth in earnings per share. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity."