Market Overview

Keep On Truckin': Argus Expects JB Hunt To Gain Market Share

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Keep On Truckin': Argus Expects JB Hunt To Gain Market Share

J B Hunt Transport Services Inc (NASDAQ: JBHT), a transport services company that offers freight solutions across the U.S., Canada and Mexico, spent the better part of the past decade adapting its business to changes in customer demand, something Wall Street's newest bull analyst appreciates. 

The Analyst

Argus' John Staszak initiated coverage of JB Hunt's stock with a Buy rating and $150 price target.

The Thesis

Over the past 10 years, JB Hunt changed its business in two notable ways, Staszak said in the initiation note. They are:

  • The reduction of the traditional long-haul truck fleet by more than 60 percent to 2,000 trucks.
  • A focus on intermodal or "truck-to-rail" transport with dedicated contract services in which trucks are allocated to one single customer.

These two businesses not only account for close to 80 percent of total revenue, but are still showing strong growth rates, Staszak said. 

Looking forward, JB Hunt is expected to not only raise its prices but gain market share, mostly in the dedicated contract services and intermodal segments, the analyst said.

The intermodal segment is taking full advantage of new business from shippers who want to avoid higher truckload rates and delays from the use of electronic logging devices, according to Argus. 

JB Hunt's momentum in 2018 should result in an 18.4-percent EPS growth rate, which marks an acceleration from 2017's 11.9-percent growth rate and 2016's decline of 3.3 percent, Staszak said.

The stock is "attractively valued" at its current 22.6x 2018 EPS estimate, which is at the low end of its three-year average range of 20x to 34x, the analyst said. 

Price Action

Shares of JB Hunt Transport Services were trading higher by 0.55 percent at the time of publication midday Tuesday. 

Related Links:

Benzinga's Top Upgrades, Downgrades For March 20, 2018

Where AI, Data, Blockchain Fit In The Trucking Industry 

Photo by DangApricot/Wikimedia. 

Latest Ratings for JBHT

DateFirmActionFromTo
Sep 2019DowngradesBuyHold
Jul 2019MaintainsHold
Jul 2019MaintainsNeutral

View More Analyst Ratings for JBHT
View the Latest Analyst Ratings

Posted-In: Argus Freight Intermodal John StaszakAnalyst Color Price Target Initiation Analyst Ratings Best of Benzinga

 

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