Market Overview

Raymond James Still Sidelined On JB Hunt Despite Strength Across The Business

Raymond James Still Sidelined On JB Hunt Despite Strength Across The Business

J B Hunt Transport Services Inc (NASDAQ: JBHT) reported a big fourth-quarter bottom-line beat with outperformance in every segment. But one analyst isn’t ready to ride the growth.

The Rating

Raymond James analyst Patrick Tyler Brown maintained a Market Perform rating on the stock.

The Thesis

The firm’s intermodal, dedicated fleet services (DCS), integrated capacity solutions (ICS) and truck segments each exceeded expectations in earnings before interest and tax.

“Digging a bit deeper, intermodal pricing was a clear standout (and we surmise key to JBI's 210 basis points year-over-year margin boost) as management was able to clinch outsized contractual renewals owed to an extremely tight truck market in 2018,” Brown wrote in a note. “This said, volumes were a tad disappointing as load growth turned negative.”

This quarter was the first in Raymond James’ coverage with negative volumes. The analyst blames issues with isolated rail services, a lack of peak accelerations and major transcon losses.

Meanwhile, DCS expanded margins, ICS profited from a contracting spot market and improved contract mix, and trucking capitalized on contract pricing strength.

Brown expects DCS to remain JB Hunt’s “pivotal growth engine” despite shifting Street focus toward the intermodal line. In fact, he remains skeptical about management’s constructive pricing guidance for the latter business.

“We simply struggle with this outlook as (setting renewal ‘timing differences’ aside) we fundamentally view intermodal as a substitute to truck, and thus an increasingly likely unfavorable truck pricing outlook should ‘spill over’ to intermodal,” he wrote.

Price Action

At time of publication, JB Hunt shares traded up 5.7 percent.

Related Links:

Headwinds, Competition For XPO Logistics Send KeyBanc To Sidelines

Another Step In The Comeback Of Roadrunner: A Mainstream Analyst Is Following Them Again

Photo by DangApricot/Wikimedia.

Latest Ratings for JBHT

Nov 2019MaintainsEqual-Weight
Oct 2019MaintainsNeutral
Oct 2019MaintainsEqual-Weight

View More Analyst Ratings for JBHT
View the Latest Analyst Ratings

Posted-In: Patrick Tyler Brown Raymond JamesAnalyst Color Earnings News Price Target Reiteration Analyst Ratings Best of Benzinga


Related Articles (JBHT)

View Comments and Join the Discussion!
Don't Miss Any Updates!
News Directly in Your Inbox
Subscribe to:
Benzinga Premarket Activity
Get pre-market outlook, mid-day update and after-market roundup emails in your inbox.
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Daily Analyst Rating
A summary of each day’s top rating changes from sell-side analysts on the street.
Fintech Focus
A daily collection of all things fintech, interesting developments and market updates.
Thank You

Thank you for subscribing! If you have any questions feel free to call us at 1-877-440-ZING or email us at

Searching For A Treatment: NASH Investigational Drugs With Catalysts This Year

Benzinga's Top Upgrades, Downgrades For January 18, 2019