KeyBanc Comments on Transportation/Logistics Stocks JBHT & HUBG

October 20, 2009 9:05 AM EDT

KeyBanc analyst comments on Transportation/Logistics stocks JBHT & HUBG:

KeyBanc analyst says, "Following J.B. Hunt Transport Services, Inc.'s (NASDAQ: JBHT) 3Q09 earnings release ($0.31 vs. our $0.30 estimate and consensus of $0.28), we are increasing our price target to $38 (from $36) and maintain our BUY rating as we anticipate the Company's industry-leading intermodal franchise to benefit from a recovery in transcontinental (western) intermodal volumes, improved pricing dynamics and a potential long-term rail contract with an East Coast rail partner. In addition, we believe truck (dedicated and over-the-road) fundamentals should build on recent results as freight markets stabilize/improve. While the reaction in shares could be muted Tuesday following a 22%increase since September 1 (vs. 10% for the S&P 500 and 7% for the Dow Jones U.S. Trucking Index), we anticipate positive news flow surrounding the Company's November 5 Investor Conference and believe the Company is well positioned longer-term to benefit from a recovery in freight fundamentals."

"In addition, we believe intermodal commentary from JBHT is directionally positive for Hub Group, Inc. (NASDAQ: HUBG) and are raising our price target to $30 (from $26) ahead of its Wednesday night 3Q09 earnings release as we anticipate intermodal fundamentals (volume and price) to firm into 2010, as well as benefits from its expanded Union Pacific relationship. Our new HUBG price target represents 24x (five-year median multiple of 22x) normalized EPS of $1.25 (2005-2008)."

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