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On Friday, Stifel analysts revised the price target for Hub Group (NASDAQ:HUBG) shares, lowering it slightly to $52 from the previous $53, while continuing to support the stock with a Buy rating. Currently trading at $41.96, InvestingPro analysis suggests the stock is slightly undervalued. The adjustment followed Hub Group’s fourth-quarter earnings report for 2024, which aligned with both Stifel’s estimates and the consensus among Wall Street analysts, showcasing an adjusted earnings per share (EPS) of $0.48. The reported GAAP EPS, which includes costs related to network realignment and acquisitions, stood at $0.40.
For the year 2025, Hub Group has provided EPS guidance ranging from $1.90 to $2.40. This forecast falls short of the earlier consensus prediction of $2.32, with InvestingPro data showing six analysts have recently revised their earnings estimates downward. Stifel’s analysis highlighted Hub Group’s robust performance in its Intermodal segment, noting better-than-expected volumes and effective cost control and efficiency. The company operates with a modest gross profit margin of 11.2%, and pricing did not meet Stifel’s projections, which they attributed to the anticipation of an inflationary pricing environment in the upcoming year.
According to Stifel, Hub Group is poised for success as the industry enters a new growth cycle. The company benefits from a surplus of container capacity, a more balanced network, a streamlined warehousing footprint, and an improved cost structure. These factors are expected to contribute to favorable incremental margins, particularly in the context of the expected low single-digit price increases in 2025.
Stifel’s commentary emphasized the company’s strong positioning, suggesting that Hub Group is arguably better prepared than ever for the forthcoming upcycle. The firm’s optimism is reflected in the reiterated Buy rating, indicating confidence in Hub Group’s potential for growth despite the minor adjustment in the price target.
In other recent news, Hub Group, Inc. reported its Q4 earnings, which aligned with analyst expectations, though the revenue fell short of estimates. The transportation management company posted adjusted earnings per share of $0.48 for Q4, matching analyst projections. However, the revenue for the quarter came in at $1 billion, slightly below the anticipated $1.02 billion, marking a 1% decline from the same quarter of the previous year.
In other developments, Hub Group’s intermodal volume increased by 14% YoY in Q4, but this was counterbalanced by a decrease in revenue per load and fuel revenue. The company’s Intermodal and Transportation Solutions (ITS) segment reported a 1% decline in revenue to $570 million, while the Logistics segment revenue dipped 2% to $429 million. For the full year 2024, Hub Group reported revenue of $3.95 billion, a 6% decrease compared to $4.20 billion in 2023.
Furthermore, Hub Group’s guidance for 2025 fell short of analyst expectations on the earnings front. The company projects full-year EPS to range from $1.90 to $2.40, compared to the consensus estimate of $2.31. However, the projected revenue, between $4.0 billion and $4.3 billion, aligns with the analyst consensus of $4.16 billion. These are the recent developments regarding Hub Group’s financial performance.
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