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BMO Analysts Revise Their J.B. Hunt Forecasts, Cut Price Target

BMO Capital updated its EPS estimates and price target on J B Hunt Transport Services Inc JBHT 0.58% in a report published Monday.

J B Hunt posted Q216 EPS of $0.92, 5 percent below the consensus estimate of $0.97 and 8 percent below their forecast of $1.00. The analysts lowered their 2016 and 2017 EPS estimates to $3.93 and $4.34, respectively, taking into account a more challenging intermodal rate environment. They reiterated a Market Perform rating on shares, and cut the price target to $84 from $88, assuming a 18x Q3/17-Q2/18 forward earnings estimate.

According to the analysts, intermodal volume growth remained strong (Q216: +9 percent; Q116: +12 percent) in part due to rail service improvements and the conversion of traffic from NSC's Triple Crown business.

"However, barring a pick-up in overall freight demand and/or a tightening of the truck market in H1/17, we expect JBHT's intermodal load growth to moderate to the mid-single-digit range next year. On the pricing front, we expect the downward pressure on base rates (Q2/16: -1 percent; Q1/16: +2 percent; Q4/15: +5 percent) to weigh on results in the coming quarters, and could make JBHT's intermodal margin guidance (down 50-100 bps y/y) tough to achieve," wrote BMO.

Apr 2016Credit SuisseMaintainsOutperform
Apr 2016BernsteinMaintainsOutperform
Apr 2016Buckingham ResearchMaintainsNeutral

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