EU and US could reach trade deal this weekend - Reuters
Friday, Raymond (NSE:RYMD) James analyst Patrick Tyler Brown reaffirmed an Outperform rating with a $155.00 price target on J.B. Hunt Transport Services (NASDAQ:JBHT), which currently trades at $140 after a significant 25.5% decline over the past six months. According to InvestingPro analysis, the company appears undervalued based on its Fair Value metrics. Brown commended the company’s strategic focus on return on invested capital (ROIC), highlighting the shift in their long-term incentive structure.
J.B. Hunt has adjusted its executive compensation plan to prioritize ROIC, moving away from the previous mix of operating income, EBITDA, and ROIC. Starting in 2024, the company’s long-term incentives will be solely based on ROIC, with an operating income modifier. This change reflects a deeper commitment to efficient capital allocation and a strategy that avoids expansion solely for growth’s sake. InvestingPro data shows the company’s current ROIC stands at 11%, while management has been actively buying back shares to enhance shareholder value.
The analyst praised J.B. Hunt’s simplification of its incentive program and its emphasis on returns. He noted that the company is managed with ROIC targets in mind, a practice that has been increasingly integrated into their long-term incentives since 2020. The firm’s decision to pivot to a pure ROIC focus is seen as a positive move that aligns with prudent capital management.
J.B. Hunt’s approach to capital allocation has been strategic, especially during economic downturns. The company has expanded its capital base significantly, as evidenced by its goal to increase container counts by 40% from 2022 levels by the year 2027.
The analyst’s reiteration of the Outperform rating and the $155.00 price target suggests confidence in J.B. Hunt’s operational strategy and its potential for delivering shareholder value. The company’s shift towards a ROIC-centric incentive model is expected to support sustained financial performance and strategic growth. InvestingPro reveals the company has maintained dividend payments for 22 consecutive years and carries a moderate debt level, with several additional ProTips available to subscribers. For comprehensive analysis, investors can access the detailed Pro Research Report, available for JBHT and 1,400+ other top US stocks.
In other recent news, J.B. Hunt Transport Services reported its first-quarter earnings, revealing an earnings per share (EPS) of $1.17, which met FactSet’s projections and slightly exceeded Benchmark’s expectation of $1.15. The company experienced a 7.6% year-over-year increase in intermodal load growth, especially in the eastern regions. However, the intermodal revenue per load saw a 2% year-over-year decrease, excluding fuel, which was better than anticipated and resulted in higher intermodal margins. Benchmark analysts have adjusted their price target for J.B. Hunt to $165, maintaining a Buy rating, while UBS decreased their target to $155, also keeping a Buy rating. Meanwhile, TD Cowen lowered their target to $140, maintaining a Hold rating, citing concerns over volume and pricing power. J.B. Hunt has also declared a regular quarterly dividend of $0.44 per share, to be distributed on May 23, 2025. Additionally, J.B. Hunt’s shareholders recently elected directors and approved executive pay at the company’s Annual Meeting. PricewaterhouseCoopers LLP was ratified as the independent accounting firm for the year 2025, reflecting the company’s commitment to transparency and regulatory compliance.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.