These are top 10 stocks traded on the Robinhood UK platform in July
Wednesday, Benchmark analysts lowered the price target on Hub Group (NASDAQ:HUBG) to $40 from the previous $49, while maintaining a Buy rating on the stock. The revision follows reports indicating a slower than expected recovery in intermodal rates. The stock, currently trading near its 52-week low of $30.97, has declined over 27% year-to-date. According to InvestingPro analysis, the company appears undervalued based on its Fair Value model, with 10 analysts recently revising their earnings expectations downward.
Benchmark’s decision comes after J.B. Hunt Transport Services Inc. confirmed that the pace of intermodal rate recovery is lagging behind expectations. Despite Hub Group’s solid loaded import volumes on the west coast and consistent intermodal volumes from rail partners Union Pacific (NYSE:UNP) and Norfolk Southern Corp. (NYSE:NSC), analysts expect a slowdown due to tariff concerns. The March seasonal build was reported to be lower than usual, and the typical second-quarter ramp is now under question. The company maintains a moderate debt level with a debt-to-equity ratio of 0.31 and generates annual revenue of $3.95 billion.
The firm noted that while over-the-road conversions are occurring, particularly in the east, intermodal pricing remains subdued. According to pre-quarter checks, shippers are resisting intermodal rate increases more than truckload rates. This resistance is contributing to the tempered pricing environment. InvestingPro data reveals the company operates with an 11.11% gross profit margin, while maintaining profitability over the last twelve months. Investors can access 8 additional exclusive ProTips and comprehensive analysis through InvestingPro’s detailed research report.
In light of these factors, Benchmark has revised its full-year 2025 and 2026 estimates for Hub Group. The firm, however, maintains a positive outlook on the company’s potential for intermodal volume growth, citing new rail agreements, effective cost controls, and robust intermodal service, including a 25% increase in local east volumes in the fourth quarter. With the next earnings report scheduled for May 8, 2025, investors can access detailed financial analysis and Fair Value estimates through InvestingPro’s comprehensive research report.
Despite the reduction in price target and estimates, Benchmark continues to endorse Hub Group with a Buy rating. They believe the company is still well situated to capitalize on intermodal volume growth opportunities. The stock currently trades at a P/E ratio of 19.62, with analyst price targets ranging from $35 to $52.
In other recent news, Hub Group reported its fourth-quarter earnings, which aligned with analyst expectations, posting an adjusted earnings per share (EPS) of $0.48. However, the company’s revenue for the quarter was $1 billion, slightly below the consensus estimate of $1.02 billion. For the full year 2024, Hub Group’s revenue was $3.95 billion, a 6% decrease from the previous year. Looking ahead, the company provided 2025 EPS guidance ranging from $1.90 to $2.40, which fell short of the consensus estimate of $2.31.
Benchmark analysts maintained a Buy rating with a $49 price target, noting the company’s positive outlook on industry trends and its efforts to improve cost structures. Stifel also maintained a Buy rating while adjusting the price target slightly from $53 to $52, citing Hub Group’s strong intermodal performance despite pricing challenges. Raymond (NSE:RYMD) James reaffirmed a Market Perform rating, expressing concerns about potential challenges like rising rail costs and driver shortages.
Hub Group’s Intermodal segment showed solid volume growth, although revenue per load declined due to a weak bid season in 2024. The company anticipates better intermodal pricing in the upcoming bid season, expecting this to enhance revenue and earnings in 2025. New rail agreements and a joint venture with EASO are expected to contribute to long-term earnings growth, despite current margin challenges in the ITS sector.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.