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J.B. Hunt on the Street: Analyst Recommendations after the 3Q17 Results


Dec. 4 2020, Updated 10:52 a.m. ET

Analysts’ recommendations

J.B. Hunt Transport Services (JBHT) has a consensus rating of 2.19, indicating a “buy.” Of the 21 analysts covering the stock, six (28.6%) recommend a “strong buy,” while five (23.8%) recommend a “buy” for the stock. Ten analysts (47.6%) suggest a “hold,” but none has issued a “sell” recommendation.

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Analysts’ price target for JBHT and peers

After the recent hurricanes in the US, many equity research companies have revised their trucking stocks’ ratings downward. Cowen and Company downgraded JBHT to “neutral,” and on October 12, JPMorgan Chase maintained an “overweight” rating but revised the target price to $121.0 per share from $107.0.

J.B. Hunt has a mean 12-month price target of $111.4 per share, indicating a potential return of 9.6% over the next 12 months. Below are its peers’ target prices:

  • Ryder System (R): $86.2, with a return potential of 8.3%
  • Heartland Express (HTLD): $21.7
  • Werner Enterprises (WERN): $34.8, with a return potential of 1.8%
  • Landstar System (LSTR): $94.1

Investors interested in indirect exposure to transport stocks can consider the SPDR S&P Transportation ETF (XTN). Major trucking companies and rail carriers in the US together make up ~35% of XTN’s portfolio.

Why are analysts divided over JBHT?

In the US trucking industry, J.B. Hunt operates one of the largest 53-feet cube container fleet. The company also runs the biggest drayage fleet in North America and is ahead of many competitors in advanced logistics-related technology.

Notably, the key factor weighing on trucking stocks going forward will be pressure to grow margins or keep them intact. A quick look at J.B. Hunt Transport’s financials shows that its operating margin has been dropping for the past 12 quarters, and though its top line is growing, its earnings aren’t.

That said, the US economy’s positive trajectory should boost the volumes of such carriers. Five of the seven Class I railroads utilize the intermodal services of JBHT, and this segment remains the largest contributor to the company’s operating revenue. Market participants will thus watch the spread between the company’s top-line growth and the rise in its operating expenses in coming quarters.


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