J.B. Hunt Q1 Guidance A Disappointment, Analyst Says

Earnings Performance - Fourth-quarter EPS of $1.53 missed the consensus estimate of $1.63, while sales of $3.15 billion were in line with expectations [1] - Operating revenue fell 5% year over year to $3.15 billion due to declines in revenue per load in Intermodal and Truckload segments, a reduction in average trucks in Dedicated Contract Services, and a 22% decrease in load volume in Integrated Capacity Solutions [2] - An unexpected $16 million intangible impairment charge, translating to about $0.10 per share, was noted [3] Analyst Adjustments and Ratings - Wells Fargo cut the price target on the stock from $200 to $190 [1] - JP Morgan reduced the price forecast to $200 from $205 while reiterating an Overweight rating [2] - Evercore ISI Group trimmed the price forecast to $202 from $207, reaffirming an Outperform rating [3] - Stifel analyst J Bruce Chan raised the price forecast to $174 from $161 while maintaining a Hold rating [3] Segment Performance and Outlook - Intermodal ended 2024 with record volumes, but residual contract pricing from earlier in the year weighed on revenue, expected to remain a headwind until the third quarter of FY25 [4] - The Dedicated segment continues to experience fleet contraction, likely persisting into the second quarter of FY25 [4] - Management guided first-quarter FY25 margins lower, projecting a 20% – 25% sequential decline in operating income [5] Revised EPS Estimates - First-quarter EPS estimates were lowered from $1.46 to $1.15, 2025 from $7.00 to $6.55, and a 2026 EPS estimate of $8.10 was set [5] Analyst Commentary - Benchmark analyst Christopher Kuhn noted that excluding an impairment charge in ICS from the BNSF acquisition, fourth-quarter EPS of $1.66 exceeded expectations due to slightly better operating income than expected, but first-quarter guidance is a disappointment [6] - The diversified model and secular growth in Intermodal and Dedicated could support long-term EPS growth, but patience may wane as estimates are revised down and mid-cycle earnings continue to get pushed out [7] Investment Exposure - Investors can gain exposure to the stock via ProShares Trust ProShares Supply Chain Logistics ETF SUPL and SPDR S&P Transportation ETF XTN [7] Stock Performance - JBHT shares are down 6.24% at $174.58 at the last check Friday [7]