On Thursday, Bernstein SocGen Group maintained a Market Perform rating on shares of J.B. Hunt Transport Services (NASDAQ: JBHT) but raised the price target from $186.00 to $190.00. According to InvestingPro data, analyst targets for JBHT range from $161 to $211, with the stock currently trading at $186.55. The firm anticipates a strong earnings report after the market closes today, driven by higher volumes.
Despite the potential for an earnings beat, the analysts remain cautious due to high expectations for earnings growth in the coming years and what they consider a stretched valuation of the stock. InvestingPro analysis confirms this view, with the stock trading at a P/E ratio of 33.48x and showing signs of being overvalued based on its Fair Value calculations. Notably, 10 analysts have recently revised their earnings expectations downward for the upcoming period.
J.B. Hunt is expected to outperform consensus estimates in the fourth quarter, with Bernstein SocGen revising its EPS estimate up by 5% to $1.68, credited to a lower tax rate. The revision reflects an increase from the previous model which was last updated in early January. The forecasted earnings beat is attributed to a predicted revenue surge and earnings before interest and taxes (EBIT) outperformance, largely driven by volume growth.
The analysts have not altered any assumptions above the operating line for J.B. Hunt's fourth quarter. However, they note a risk to their bullish forecast concerning the intermodal margin, where their expectation is 7.2% compared to the street's 7.0%. This could be a pivotal factor in the upcoming earnings announcement.
J.B. Hunt's stock is currently trading at approximately 26 times forward earnings, which is 1.5 standard deviations above the five-year average. The market's anticipation of an inflection in earnings growth is factored into the stock's valuation, despite revenue declining 7.07% over the last twelve months.
Bernstein SocGen agrees that an earnings inflection point is near, but cautions that the current stock price leaves little margin for error. The analysts suggest that the expected earnings growth may be more weighted towards the latter part of the 2025-2026 period.
It is worth noting that the company has maintained dividend payments for 21 consecutive years, with 11 years of consecutive increases, demonstrating consistent shareholder returns despite market cycles. For deeper insights into JBHT's valuation and financial health metrics, investors can access the comprehensive Pro Research Report available on InvestingPro.
In other recent news, J.B. Hunt Transport Services encountered a mixed bag of developments. Benchmark analysts reaffirmed their Buy rating for the company, citing an anticipated rebound in domestic intermodal volume growth and a solid relationship with rail partner BNSF. However, CFRA downgraded the company's stock to Sell, citing concerns about the company's ability to expand margins due to rising costs and heightened competition.
On the other hand, Citi analyst adjusted the stock price target for J.B. Hunt, lowering it to $204 from the previous $227, while maintaining a Buy rating. Despite challenges in the fourth quarter of 2024, Citi's analysis suggests that these difficulties are temporary and have largely been addressed.
The company also declared a quarterly dividend of $0.43 per common share, reflecting its ongoing commitment to shareholder returns. Despite a 3% decline in revenue, a 7% drop in operating income, and a 17% decrease in diluted earnings per share, the company saw a 5% year-over-year increase in intermodal volumes.
J.B. Hunt also revised its capital expenditures for 2024 down to $625 million and repurchased approximately $200 million in stock. The company was recognized as one of Newsweek's most reliable companies of 2025. These are the recent developments for J.B. Hunt Transport Services.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.