Transport services JB Hunt today
JB Hunt Transport Services
As of 01/17/2025 16:00 Eastern
- 52 week range
- $153.12
▼
$219.51
- Dividend yield
- 1.00%
- P/E ratio
- 31.35
- Target price
- $191.67
JB HuntaNASDAQ: JBHT The share price fell sharply following fourth-quarter 2024 results, but likely won’t fall much longer, much like the transportation industry. The results were good but moderate compared to analysts’ expectations, casting doubt on the recovery in freight traffic.
The freight market bottomed out in 2023 and 2024 and has yet to regain its momentum, but it will. Overcapacity and sluggish inventory replacement are expected to give way to rising volumes and spot rates in 2025. Forecasts vary, but the trucking industry is expected to post mid- to high-single-digit growth with momentum picking up in the second half of the year. Intermodal, a segment in which JB Hunt excels, is likely to lead with growth in the mid-teens, supported by rising international demand.
The news has impacted truckers and freight forwarders across the board, such as Knight-Swift Transportation. New York Stock Exchange: KNXHPO New York Stock Exchange: XPOand a skirt NASDAQ: SAIA everyone retreats. However, the pullback was minimal and highlighted the strength of the existing uptrend that has allowed these stocks to rally this year. The Dow Jones Transportation Average fell less than 1% on the news, showing support above the group of critical moving averages that form the Golden Cross. The gold crossover is an important technical signal as it indicates a change in market conditions and an alignment of short-, medium- and long-term investor sentiment.
J.B. Hunt has a mixed quarter; Supports cash flow and return on capital
JB Hunt had a mixed but not bad quarter, with revenue down slightly more than consensus estimates of 4.3%. The weakness was driven by declines in revenue per download, downloads and volume in critical segments. However, this weakness was offset by productivity gains, including increased capacity and improved efficiency, leading to a leveraged recovery as we move towards 2025.
The Integrated Power Solutions segment was the weakest, with a 15% decline and a net loss. Contracts for dedicated and last mile services declined in the single digits, while intermodal services declined by just 2%. The company does not provide any forecasts, but analysts are optimistic; they forecast revenue and profit growth in 2025.
While the company’s earnings were weaker than expected, they were sufficient to maintain a healthy balance sheet and return on equity. The company is reducing its debt and freeing up cash flow to bolster its strong balance sheet. Long-term debt and other liabilities are less than 0.5x equity and 0.2x assets, putting it in a strong position. Return on equity includes dividends and share buybacks, which lowered the figure by 0.5% in the fourth quarter and 2.6% for the year and contributed to a gradual increase in book value.
Analysts Cut Targets for JB Hunt: Here’s a Look at the Stock’s Value
Analysts reacted to the news by lowering their price targets. However, changes tracked by MarketBeat show growing confidence in the $92.50 consensus target ahead of the release and continue to rate this and other stocks in the industry a Moderate Buy. This implies a 12% upside potential for the stock and is likely a low target for the market. Once the recovery gains momentum, analysts are likely to raise their expectations for the stock’s performance and price, leading to higher highs later in the year.
Institutional activity could limit JB Hunt’s first-quarter earnings. Institutions are bullish on transportation stocks, having bought shares in 2024, including the first, second and fourth quarters, but sold during the third-quarter rally. If this repeats in 2025, the share price will have difficulty maintaining upward momentum, no matter how good the news. In terms of their support, the buys align with the lower end of analysts’ target range and the lower end of the $156-$166 region.
JB stalks, but not for long
JB Hunt’s price has dropped, but it won’t stay low for long. The market is moving towards solid support levels, which will likely lead to a significant recovery this year. However, the rebound/recovery may not begin until the second, and until then this stock will trade within its range. Critical support levels are $166 and $156.
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