JB Hunt Moving Services Today
JB Hunt Transport Services
As of 01/17/2025 at 04:00 PM ET
- 52 week range
- $153.12
▼
$219.51
- Dividend yield
- 1.00%
- P/E ratio
- 31.35
- Price target
- $191.67
J.B. HuntNasdaq:GBHT The stock price fell after Q4 2024 results but is unlikely to decline for long, nor will the transportation industry follow along. The results were not bad but tepid compared to analysts’ expectations, leaving the shipping recovery in doubt.
The freight market bottomed out in 2023 and 2024, but it has yet to regain its momentum, but it will. Excess capacity and slower inventory replacement are expected to give way to increased volumes and spot rates in 2025. Forecasts vary, but the shipping industry is expected to see a mid- to high-single-digit pace, with strength building in the back half. Intermodal, the sector in which JB Hunt excels, is likely to see growth in the mid-teens, supported by increased international demand.
The news affected truckers and express companies across the board, with names like Knight-Swift Transportation New York Stock Exchange: KNXxpo New York Stock Exchange: ExpoAnd a skirt Nasdaq: Sia All withdrawal. However, the pullbacks were minimal and revealed strength within existing uptrends that have these stocks poised to rally this year. The Dow Jones Transportation Average fell less than 1% on the news, showing support above a group of important moving averages forming a golden cross. The golden cross is an important technical signal because it shows changing market conditions and alignment of investor sentiment in the short, medium and long term.
J.B. Hunt has a mixed quarter. Maintains cash flow and return on capital
JB Hunt had a mixed quarter but it wasn’t bad, with revenues contracting a little more than expected -4.3%. The weakness was driven by declines in revenue per load, number of loads and volume of critical segments. However, the weakness was offset by productivity gains, including capacity tightening and improved efficiency, setting the stage for a recovery heading into 2025.
Sector-wise, Integrated Capacity Solutions was the weakest, with a 15% contraction and net loss. Custom contract services and final mile services were contracted in mid-single digits and intermodal by just 2%. The company is not giving guidance, but analysts are optimistic; They expect revenue and profits to grow in 2025.
Although they were weaker than expected, the company’s earnings were enough to maintain a healthy balance sheet and return on capital. The company is reducing its debt and freeing up cash flow to bolster its strong balance sheet. Long-term debt and other liabilities are less than 0.5x equity and 0.2x assets, putting it in a strong position. Return of capital includes dividends and share repurchases, which reduced the number by 0.5% in the fourth quarter, 2.6% for the year, and helped a gradual increase in book value.
Analysts lower targets for JB Hunt: See the value in this stock
Analysts’ response to the news is to lower target prices. However, reviews tracked by MarketBeat show increasing conviction in the pre-release consensus target of $92.50, and continue to rate it and others in the industry as a Moderate Buy. This implies a 12% upside for the stock and is likely a low target for the market. Once the recovery gains strength, analysts will likely increase their forecasts for the results and the stock price, leading to higher highs later in the year.
Institutional activity may limit JB Hunt’s gains in the first quarter. Institutions are bullish on transportation stocks, having bought on balance in 2024, including Q1, Q2 and Q4, but sold during the Q3 rally. If this happens again in 2025, the stock price will have a hard time maintaining upward momentum no matter how good the news is. In terms of their support, buying is in line with the lower end of analysts’ target range and lows in the $156 to $166 area.
JB Hunt Down, but not for long
JB Hunt’s price action is down, but it won’t stay down for long. The market is moving towards a strong support level, which is likely to trigger a strong recovery this year. However, the bounce/recovery may not start until the second, leaving this stock to trade within its range until then. Critical support levels are $166 and $156.
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