Piper Jaffray Gives JB Hunt Earnings Preview

JB Hunt JBHT is scheduled to report 4Q10 earnings on Friday, January 28th. Piper Jaffray believes that a tight US Supply Chain driven by accelerating demand and more so capacity constraints in 2011 results in TL industry yield upside and a modal shift from TL to Intermodal rail. Given increased conviction in Piper's thesis playing out, it has raised EPS and price target from $42 to now $48 and believe JBHT could be the perfect mouse trap for capturing both stronger TL yields and intermodal market share gains. We reiterate our Overweight rating. Forward macro indicators suggests US Freight demand reaccelerates during 1H11. Prior multi year TL capacity reductions, limited net TL capacity additions, and regulatory headwinds likely set the stage for modal shift from TL to Intermodal in 2011 - with JBHT seeing strong benefit. JBHT is arguably the best all encompassing play on a tighter than expected 2011 US supply chain. Piper Jaffray raised its EPS estimates – now above Consensus – driven in part by stronger Intermodal and TL profit expectations and see further meaningful upside earnings potential. JBHT closed Friday at $42.22