J.P. Morgan Raises Price Target on Hub Group (HUBG)

J.P. Morgan is out with a research report this morning, where it reiterates its Overweight rating on Hub Group HUBG; it has a $40.00 price target on the stock, up from $36.00. The JPM analysts cited the company's earnings release, which was in line with the JPM estimate, as well as the Street consensus. Note that this was supported by a low tax rate, which boosted earnings by $0.03/ share. Although the pace of net revenue margin expansion was slower than the analysts had forecasted, they believe further improvement in intermodal volume and pricing should support margin expansion in 2011. As for valuation, the analysts remarked, “We are raising our Dec 2011 price target to $40, based on applying a 21x multiple (vs. 16-24x historical range) to our 2012 EPS forecast of $1.90.”