KeyBanc Reiterates a 'Buy' on J.B. Hunt Transport Services (JBHT); Raises Price Target

May 19, 2009 9:11 AM EDT

KeyBanc reiterates a 'Buy' on J.B. Hunt Transport Services (Nasdaq: JBHT). Price target increased from $29 to $33.

KeyBanc analyst says, "Following our recent investor field trip with J.B. Hunt to Norfolk Southern's (NYSE: NSC) Erail intermodal facility in Newark, N.J., we have increased confidence regarding JBHT's ability to grow intermodal volumes ahead of overall market rates, primarily resulting from modal conversion of truck freight in the Eastern United States. As a result, we reiterate our BUY rating and increase our price target to $33, which reflects a higher multiple on its intermodal segment in our sum-of-the-parts valuation."

"In our view, JBHT is best positioned among intermodal marketing companies or truckload carriers to benefit from these secular trends given its existing intermodal network and sizable drayage (local trucking) operation, which provide notable cost and service advantages relative to its competitors. In 1Q09, JBHT added approximately 50 new intermodal lanes, and will be increasing its intermodal fleet during 2009 by a net 4,300 containers (or 11% from year-end) to facilitate growth."

J.B. Hunt Transport Services, Inc., together with its subsidiaries, operates as a surface transportation company in North America.

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