J.B. Hunt Q1 Guidance A Disappointment, Analyst Says

J.B. Hunt Transport Services, Inc. JBHT shares dipped on Friday after Wells Fargo cut its price target on the stock from $200 to $190.

Yesterday, the company reported fourth-quarter EPS of $1.53, which missed the consensus of $1.63, while sales of $3.15 billion were in line with the street view.

Operating revenue fell 5% year over year to $3.15 billion due to a 3% and 2% decline in revenue per load excluding fuel surcharge revenue in Intermodal and Truckload segments, respectively, a 4% reduction in average trucks in Dedicated Contract Services and a 22% decrease in load volume in Integrated Capacity Solutions.

Also, JP Morgan cut the price forecast to $200 from $205, while reiterating an Overweight rating.

Evercore ISI Group trimmed the price forecast to $202 from $207, reaffirming an Outperform rating.

Meanwhile, Stifel analyst J. Bruce Chan raised the price forecast to $174 from $161 while maintaining a Hold Rating.

The analyst notes an unexpected $16 million intangible impairment charge, translating to about $0.10 per share.

Intermodal ended 2024 with record volumes, but residual contract pricing from earlier in the year weighed on revenue. The analyst adds that it is expected to remain a headwind until the third quarter of FY25, with only gradual improvement.

The analyst says the Dedicated segment continues to experience fleet contraction, likely persisting into the second quarter of FY25.

Chan writes that management guided first-quarter FY25 margins lower, citing a disconnect between optimistic Street estimates and expectations of inventory pull-forward, projecting a 20% – 25% sequential decline in operating income.

Overall, the analyst says this quarter had positives but raised concerns about near-term earnings and stock performance.

Chan lowered the first-quarter EPS estimates from $1.46 to $1.15, 2025 from $7.00 to $6.55, and set a 2026 EPS estimate of $8.10.

Benchmark analyst Christopher Kuhn writes that excluding an impairment charge in ICS from the BNSF acquisition, fourth-quarter EPS of $1.66 exceeded expectations owing to slightly better operating income than he expected. The analyst adds that first-quarter guidance is a disappointment.

The analyst says that he continues to consider JBHT’s diversified model and secular growth in Intermodal and Dedicated could support long-term EPS growth. However, patience may wane as estimates are revised down and mid-cycle earnings continue to get pushed out.  

Investors can gain exposure to the stock via ProShares Trust ProShares Supply Chain Logistics ETF SUPL and SPDR S&P Transportation ETF XTN.

Price Action: JBHT shares are down 6.24% at $174.58 at the last check Friday.

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