J.B. Hunt Transport Services' Room For Intermodal Growth Prompts 4% Price Target Hike By This Analyst - JB Hunt Transport Servs (NASDAQ:JBHT)

Raymond James analyst Patrick Tyler Brown reiterated an Outperform rating on the shares of J.B. Hunt Transport Services Inc JBHT and raised the price target from $195 to $203.
The company reported Q4 FY22 sales growth of 4% Y/Y to $3.65 billion, missing the consensus of $3.84 billion.
While revenues underperformed Street expectations, adjusted operating income ($346 million) was largely in-line, driven primarily by pricing gains as volumes broadly declined, particularly within intermodal and trucking, said the analyst.
Looking to segments, Intermodal volumes remain challenged (-1% y/y), and sequentially decelerated throughout the quarter, the analyst added.
Undoubtedly the near-term environment remains challenging given elevated inventory levels and a cloudy macro, said the analyst.
This said, the management feels positioned to weather the storm as rail service improves, customer conversations continue to indicate a desire to convert highway business to the rails, and the pipeline in DCS remains strong, added the analyst.
While opaque in the near term, the analyst believes that JBHT’s longer-term story lies in its multi-year intermodal capacity addition program, driving box turns from ~1.5x to ~1.8x, leaning into its 360-box program and continued growth in its sticky DCS segment.
While an improving macro, sustained improved service, and customers' willingness to convert to intermodal remain key, the analyst sees the building blocks for upside potential being laid.
Price Action: JBHT shares are trading higher by 0.89% at $186.66 on the last check Thursday.

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