YRC Worldwide shares fall after analyst cuts to 'Sell'

"We believe the company has some real difficult operational, financial and competitive issues to overcome before the earnings picture can look much brighter," analyst David G. Ross said in a client note.

Ross also said the stock is now too expensive -having surged 40 percent since the company reported first-quarter earnings on April 24.

The analyst said he is "skeptical" of the company's ability to meet its second-quarter earnings per share expectations, due to a sluggish economy and continuing operational issues. Ross also believes that benefits from a newly ratified contract with the Teamsters union will likely be felt later than the company currently expects.

He added that competition is stiffening in the nation's less-than-truckload segment, where YRC Worldwide is the largest player. FedEx Corp. has expanded its holdings in the sector through acquisitions and a number of smaller players are expanding their businesses as well.

Less-than-truckload, or LTL, carriers fill their trucks from a variety of sources and might re-sort and redistribute it at a company terminal along their route.

Shares of YRC fell 47 cents, or 2.6 percent, to $17.69 in afternoon trading. In the past year, the stock has ranged between a low of $10.99, set in March, and a high of $40.59, hit last June.