Analysts: J.B. Hunt Q1 revenue, earnings expected to fall

Lowell-based carrier J.B. Hunt Transport Services Inc. is expected to post declines in earnings and revenue in the first quarter amid uncertainty over how tariffs might affect the industry, analysts said.

After the markets close Tuesday (April 15), J.B. Hunt is expected to report earnings declined to $1.15 per share in the first quarter from $1.22 per share in the same period last year, based on a consensus of 21 analysts. Revenue is projected to fall by 1.27% to $2.91 billion from $2.94 billion.

In an earnings preview, analyst Daniel Imbro, senior associates Brady Lierz and Joe Enderlin, and associate Reed Seay, all of Little Rock-based Stephens Inc., said intermodal pricing expectations leading into 2025 called for flat to modest growth. However, “a weaker macro could present risk to expectations, and checks suggest some deceleration later in (the first quarter.) Volumes flowed into the West Coast for much of (the first quarter), but there was some pull-forward. And outbound West Coast volume slowed in March.”

J.B. Hunt is expected to report “solid overall (first-quarter) volumes,” the analysts said. But they also expect “challenged volumes” in the brokerage segment, “as spot volumes are scarce, along with soft final mile, as consumers hold off on big-ticket purchases.”

In the near term, analysts expect J.B. Hunt to miss earnings projections “as we lowered our intermodal volume assumption to be more in line with seasonality and lowered our pricing assumptions.” The analysts also lowered dedicated and final mile segment estimates. Slightly better brokerage estimates partially offset this.

“Investor sentiment remains bearish around the intermodal players, as recent channel checks indicate the pricing environment could be getting more competitive, particularly as the truckload pricing environment could be weaker than expected,” analysts said. “Other than pricing updates, we will listen for updated views on intermodal demand given the near-term tariff uncertainty that likely weighs on (quarter-to-date) trends.”

The analysts lowered their 12-month target price to $170 from $195. Stephens maintained a buy or overweight rating on the stock.

Shares of J.B. Hunt (NASDAQ: JBHT) closed Wednesday (April 9) at $141.65, up $12.19 or 9.42%. In the past 52 weeks, the stock has ranged between $127.32 and $200.40.

Following is a preview by segment.

• Intermodal

Segment trends “seem to be a continuation of the back half of 2024 with solid volume growth but continued pricing pressure,” analysts said. The segment comprised 49% of the company’s revenue and 52% of its operating income in 2024.

Volumes are expected to rise by 4.5% in the first quarter from the same period last year, “underperforming normal seasonality to reflect our belief that there was some pull-forward in (the fourth quarter.) This should soften as we move into the back half of the year as we lap strong volumes beginning in (the third quarter.)

“Tariffs could cause some noise through the year as shippers weigh their options, but at the moment it is hard to tell how much of the volume strength is from pull forward ahead of tariffs,” the analysts said.

They expect pricing to fall year over year through the second quarter, but it should be up in the second quarter from the first quarter. Pricing should rise in the second half of this year from the same period in 2024.

• Dedicated

Analysts said the dedicated segment is becoming more competitive, “particularly as shippers realize they can still take advantage of lower spot rate prices in the (truckload) market.” The competitive market could limit rates for the segment this year. Fleet sizes have been declining, and losses are expected in the first and second quarters, analysts said.

“We are modeling a modest improvement in (the dedicated segment) through the year as the truckload market modestly tightens, although we lowered our assumptions as the magnitude of improvement could be biased lower,” analysts added. First-quarter margins are expected to be impacted by weather. Analysts expect an operating margin of 9.8%.

• Brokerage

The segment posted a nearly $56 million loss in 2024, and analysts expect “a significant improvement” year over year. The decline in truck rates in the first quarter is expected to “support net revenue margin, and we are taking up our profitability estimate. We expect continued volume headwinds and believe (J.B. Hunt) will continue addressing its pricing and cost structure through the year.”

Analysts expect earnings before interest and taxes of $20.1 million in 2025, “with some degradation of gross margin but revenue and operating expense improvement.”