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On Friday, TD Cowen maintained a Hold rating on J.B. Hunt Transport Services (NASDAQ:JBHT), while reducing the price target from $180.00 to $171.00. The adjustment follows J.B. Hunt's fourth-quarter performance, which slightly missed expectations, and a first-quarter guidance suggesting a sequential earnings decline that falls below consensus estimates. According to InvestingPro data, 10 analysts have recently revised their earnings estimates downward, with the stock currently trading at a relatively high P/E multiple of 31x.
J.B. Hunt reported record volumes and strong service within its Intermodal (IM) division, yet the analyst noted that margin limitations are restricting growth benefits, as the over-the-road (OTR) market continues to impact pricing negatively. Furthermore, the company's dedicated segment faces challenges from increased churn and startup costs, prompting a more cautious outlook for growth in 2025. Despite these challenges, InvestingPro analysis indicates the company maintains a GOOD overall financial health score, operating with moderate debt levels and consistent dividend payments for over two decades.
The company's first-quarter guidance indicates an expected EBIT of approximately $174 million at the midpoint, which is roughly 20% lower than previous consensus expectations. TD Cowen's analyst pointed out that this decline was more severe than the traditional seasonal earnings decrease, which historically fell mid-teens sequentially in the first quarter.
Using historical data as a benchmark, the first quarter typically accounts for 21% of J.B. Hunt's full-year earnings. Based on this pattern, the company's current guidance suggests a run rate of approximately $5.50 EPS for 2025. However, TD Cowen's assessment remains slightly more optimistic due to the abnormal freight environment, which is anticipated to improve in the second half of the year.
In other recent news, J.B. Hunt Transport Services has been the focus of several analyst adjustments following its recent earnings report. The company reported a fourth-quarter earnings per share (EPS) of $1.53, falling short of both Stifel's and the consensus estimates. The earnings were impacted by an unexpected $16 million intangible impairment charge.
Despite this, revenue numbers were in line with expectations. Stifel analysts have increased the stock's price target to $174, maintaining a Hold rating, while BMO Capital Markets reduced its price target to $200, citing an upcoming positive turn in the freight cycle.
Bernstein SocGen lowered its price target to $180 after the earnings report, expressing concern over the first quarter EBIT guidance. Stephens analyst Justin Long reaffirmed a price target of $205 and an Overweight rating, despite the earnings shortfall.
Goldman Sachs maintained its Buy rating and $188 price target, expressing optimism for the latter half of the year despite a forecasted seasonal downturn in Q1. Lastly, Citi adjusted its price target to $193, continuing to recommend the stock as a Buy despite a projected decline in Q1 operating income.
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