Jefferies Raises Price Target on J.B. Hunt (JBHT), Solid Q1 Results and Future Outlook
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Price: $274.47 --0%
Rating Summary:
21 Buy, 17 Hold, 1 Sell
Rating Trend:
Up
Today's Overall Ratings:
Up: 8 | Down: 5 | New: 26
Rating Summary:
21 Buy, 17 Hold, 1 Sell
Rating Trend:
Up
Today's Overall Ratings:
Up: 8 | Down: 5 | New: 26
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Jefferies is reiterating its Buy rating on shares of J.B. Hunt Transport Services (NASDAQ: JBHT) and is raising its price target from $50 to $53 following its Q1 conference and results.
The company was able to top the Streets EPS estimate by 5% in a quarter that was plagued higher fuel prices, poor weather, and a customer bankruptcy in the Dedicated division. Revenue was driven by intermodal and was up 23.1% Y/Y, which was well above the firms estimate of a 15% increase Y/Y.
The firm reports that it has increased it's conviction that intermodal volumes can continue to grow at mid-teen rates throughout the year, with strength continuing well into 2012. It notes that this is very key as it is the top reason to own shares of JBHT.
Jefferies believes that JBHT will see margin expansion accelerating as
2011 progresses in the other divisions, 30% were as intermodal makes up 70% of the company's earnings mix. Dedicated should trend to 90% from 92.2% in 1Q:11; Truck seems on track to 91%-92% from 95.1% in the quarter; and ICS should improve to 95% or better from 96.5% in 1Q.
An analyst at Jefferies reported, "One of the most striking datapoints out of the release was JBHT's TL revenue per loaded mile, net of fuel, up 9% Y/Y for the quarter. Given that contract rates were up only 4% Y/Y, and with a very small amount of JBHT's book exposed to spot, this implies double-digit type Y/Y spot TL prices. To be clear, year-ago comps were very easy, 1Q spot prices are always "crazy," and we suspect the Y/Y rate to decelerate to 5% from 9% in 1Q. In addition, given how little spot capacity JBHT has relative to other names, it arguably can "name its price" in this market. Even still, this bodes well for next week's TL reports."
The firm is raising its 2011 and 2012 EPS estimates from $2.12 and $2.52 to $2.14 and $2.66. It is also raising its revenue estimates from $4,238 million and $4,613.3 million to $4,409 million and $5,018.6 million.
For more ratings news on J.B. Hunt Transport Services click here and for the rating history of J.B. Hunt Transport Services click here.
Shares of J.B. Hunt Transport Services closed at $47.53 yesterday.
The company was able to top the Streets EPS estimate by 5% in a quarter that was plagued higher fuel prices, poor weather, and a customer bankruptcy in the Dedicated division. Revenue was driven by intermodal and was up 23.1% Y/Y, which was well above the firms estimate of a 15% increase Y/Y.
The firm reports that it has increased it's conviction that intermodal volumes can continue to grow at mid-teen rates throughout the year, with strength continuing well into 2012. It notes that this is very key as it is the top reason to own shares of JBHT.
Jefferies believes that JBHT will see margin expansion accelerating as
2011 progresses in the other divisions, 30% were as intermodal makes up 70% of the company's earnings mix. Dedicated should trend to 90% from 92.2% in 1Q:11; Truck seems on track to 91%-92% from 95.1% in the quarter; and ICS should improve to 95% or better from 96.5% in 1Q.
An analyst at Jefferies reported, "One of the most striking datapoints out of the release was JBHT's TL revenue per loaded mile, net of fuel, up 9% Y/Y for the quarter. Given that contract rates were up only 4% Y/Y, and with a very small amount of JBHT's book exposed to spot, this implies double-digit type Y/Y spot TL prices. To be clear, year-ago comps were very easy, 1Q spot prices are always "crazy," and we suspect the Y/Y rate to decelerate to 5% from 9% in 1Q. In addition, given how little spot capacity JBHT has relative to other names, it arguably can "name its price" in this market. Even still, this bodes well for next week's TL reports."
The firm is raising its 2011 and 2012 EPS estimates from $2.12 and $2.52 to $2.14 and $2.66. It is also raising its revenue estimates from $4,238 million and $4,613.3 million to $4,409 million and $5,018.6 million.
For more ratings news on J.B. Hunt Transport Services click here and for the rating history of J.B. Hunt Transport Services click here.
Shares of J.B. Hunt Transport Services closed at $47.53 yesterday.
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