Hub Group stock rating reiterated at Buy by Benchmark, price target $40

Investing.com - Benchmark has reiterated its Buy rating on Hub Group (NASDAQ:HUBG) with a price target of $40.00, according to a research note published on Wednesday. Currently trading at $34.16, InvestingPro analysis suggests the stock is undervalued, aligning with Benchmark’s optimistic outlook.

The research firm is lowering its estimates ahead of Hub Group’s third-quarter results, citing slower-than-expected intermodal volume growth. Benchmark noted that Hub Group did not experience a robust early peak season, though some surcharges have been implemented with additional opportunities expected in the fourth quarter.

These surcharges remain below last year’s levels, potentially impacting the company’s financial performance for the current fiscal year, according to the research note.

Benchmark also pointed out that new Final Mile awards announced in the second quarter are ramping more slowly than anticipated, though the firm expects stronger traction in 2026 for this segment of Hub Group’s business.

As a result of these factors, Benchmark expects Hub Group’s fiscal year 2025 results to come in near the low end of management’s earnings per share guidance range of $1.80 to $2.05.

In other recent news, Hub Group, Inc. has completed the acquisition of certain intermodal assets from Marten Transport, Ltd., adding approximately 1,200 refrigerated containers and strengthening its commercial relationships with food and beverage shippers. This acquisition supports Hub Group’s strategy to enhance its core business operations. In a significant personnel update, Thomas P. LaFrance, the company’s Executive Vice President and Chief Legal Officer, has announced his retirement effective January 2, 2026, but will assist with transition activities until March 6, 2026. Additionally, the company announced the passing of board member Lisa Dykstra, who served on the audit, compensation, and nominating and governance committees.

Analyst firm Stifel has lowered its price target for Hub Group to $41 from $45, citing soft freight demand and uncertainty in downstream consumption. Despite this, Stifel maintains a Buy rating on the company’s stock. Benchmark also reiterated its Buy rating with a $40 price target, noting the potential benefits from the proposed merger between Union Pacific and Norfolk Southern, which are Hub Group’s exclusive rail partners.

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