On Friday, Bernstein SocGen analysts adjusted their outlook on shares of J.B. Hunt Transport Services (NASDAQ:JBHT) by reducing the price target from $190.00 to $180.00.
The firm maintained its Market Perform rating for the logistics company’s shares. The revision followed J.B. Hunt’s fourth-quarter earnings report, which revealed a 3.8% adjusted EPS beat compared to street estimates, bolstered by stronger-than-anticipated intermodal volumes and margins.
The analysts acknowledged the solid fourth-quarter performance but expressed concern over the first-quarter EBIT guidance, which they believe challenges the expected rate of earnings recovery.
According to the analysts, the new guidance does not suggest an imminent improvement in earnings, prompting a cautious stance on the stock. They indicated that it might be some time before J.B. Hunt can deliver or guide towards better results later in 2025.
While the fourth quarter was satisfactory, the first-quarter guidance was described as lacking "green shoots," a term often used to indicate early signs of economic recovery. This outlook led the analysts to revise their financial model for J.B. Hunt to reflect a less optimistic start to 2025. Despite this, they anticipate pricing to firm up later in the year, even if J.B. Hunt is currently hesitant to guide towards this trend.
The report highlighted that the high rate of earnings compounding included in consensus estimates and the company’s high valuation have been reasons for Bernstein SocGen’s previous reluctance to recommend J.B. Hunt stock over the last two years.
The analysts suggested that J.B. Hunt’s management appears to be attempting to temper high expectations, but the lack of clarity on what changes are forthcoming could affect investor confidence in the short term.
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