JBHT - J.B. Hunt Transport stock is called a freight recovery play by JPMorgan

2023-05-11 08:03:13 ET

JPMorgan upgraded J.B. Hunt Transport Services ( NASDAQ: JBHT ) to an Overweight rating from Neutral on Thursday.

The firm turned more positive on J.B. Hunt as part of a broader freight recovery play for times ahead when imports are recovering, truckload rates are rising and rail service is improving.

Analyst Brian Ossenbeck noted that J.B. Hunt is a structurally advantaged intermodal provider with in-house drayage capacity and a 100% owned-chassis fleet, but it is subject to swings in the truckload cycle and rail service levels. He said the volatility makes it more challenging for the company to pursue secular growth opportunities by taking share off the highway, and ESG-driven conversions are slow to develop. Looking ahead, a recovery in imports and more positive commentary from customers is expected to quickly benefit JBHT's valuation. In addition, the smaller brokerage segment is investing heavily in a digital freight matching platform, which could help expand the company’s ability to do more for shippers in an asset-light model.

JPMorgan assiged a price target on JBHT of $204, which reflects a forward P/E multiple of 21.5X based on the firm's EPS estimates.

Shares of J.B. Hunt ( JBHT ) rose 1.35% in premarket action to $178.95.

More on J.B Hunt:

• J.B. Hunt: The Freight Environment Is Clearly Challenged
• Read more breakdowns on J.B Hunt from Seeking Alpha analysts
• View the growth metrics
• See the financial and valuation comparisons to sector peers
• Dig into the Seeking Alpha Quant Rating

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