Jefferies Raises Price Target on J.B. Hunt (JBHT), Sustains Growth Over Rising Expenses

Jefferies is maintaining its Buy rating on shares of J.B. Hunt Transport Services (NASDAQ: JBHT) while raising its price target from $53 to $55.

The firm reports that JBHT posted solid quarterly earnings for the second quarter considering higher-than-expected fuel costs and higher driver pay, and weather issues. The company posted 32 percent earnings growth with a with EPS of $0.53. Total revenue growth grew by 22 percent year-over-year, up from 18.5 percent in Q1.

An analyst from Jefferies comments on margin expansion, "For the year, we expect Dedicated to trend to 90.2%; Truck seems on track to 94%-95% from 96.1% last year; and ICS should improve to sub 96% from 96.8% last year. JBHT's margin improvements strike us as more sustainable over the course of a cycle than other asset-based names."

Jefferies raised its 2011 and 2012 EPS estimates from $2.14 and $2.66 to $2.15 and $2.77. The firm also raised its revenue estimates from $4.409 billion and $5.018 billion to $4.544 billion and $5.151 billion.

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 $47.71 yesterday.

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