J.B. Hunt Transport Overcorrects Into a Buying Opportunity

Key Points

• J.B. Hunt's stock price is overcorrecting on tariff fears and offering a deep value opportunity to investors. 
• Analysts are lowering their price targets, but this stock has moved below the expected range.
• Institutions provide a strong support base for this dividend-paying stock. 

J.B. Hunt’s NASDAQ: JBHT stock share price came under pressure with the threat of tariffs and their economic impact and fell to a new low following its Q1 release. The low was catalyzed by tepid guidance relative to analysts' forecasts and the price target reset it caused. The takeaway is that JBHT analysts are impacting the price action in Q2. Still, the market has overcorrected, falling below the range's low end and offering investors a deep-value opportunity in this transportation stock.

This opportunity may not last long because the headwinds impacting sentiment in early Q2 could evaporate as quickly as they appeared. 

MarketBeat tracked five analyst revisions within the first day of J.B. Hunt's Q1 release, four of which included lowered price targets. However, the consensus of the five consists of a solid Buy rating and a forecast for 25% upside.

The single outlier is a reiterated price target that adds $25 to the consensus of revisions and aligns with the broader consensus.

It forecasts a nearly 40% upside, but the lowest analyst price target highlights the value opportunity. Trading at $125, JBHT stock is more than 10% below the low target, trading at a critical support level that limits the downside risk. That level aligns with highs set in 2019 and the stimulus-induced breakout the following year. 

J.B. Hunt: Business Contracts in Q1 But Less Than Expected 

J.B. Hunt faced headwinds in Q1, including reduced truck counts, fewer stops, fewer total loads, and lower revenue per mile in critical segments. However, the damage was less than feared, leaving the quarterly revenue at $2.92 billion, down 0.7% annually but 70 basis points better than expected.

Segmentally, Intermodal was strongest, with a 5% gain driven by volume increases, but weaknesses in all other segments offset the strength. Dedicated Contract Services fell by 4%, Integrated Capacity Solutions by 6%, Trucking by 7%, and Final Mile Services by 12%. 

The margin news is another area with hidden strength. The company experienced margin pressure, but less than expected, leaving the GAAP and adjusted earnings down year-over-year but ahead of forecasts. The critical detail is that earnings are sufficient to sustain the company’s financial health during the business downturn, including the dividend and share repurchases. 

Share repurchases were robust in F2024 and Q1 F2025, reducing the count by about 4% by the end of the reporting period. Regarding the dividend, the stock yields about 1.4%, with shares at a multi-year low, the highest forward yield it has offered in many years.

The balance sheet reflects the business slowdown and aggressive buybacks with decreased cash and increased debt, but no red flags exist. The company’s positive cash flow can sustain the business, and debt leverage is low at roughly 0.25x equity. 

Institutional Activity is Bullish for J.B. Hunt

Institutional activity, including selling, ramped to a multi-year high in Q1 2025 but is otherwise bullish for this market.

The balance of activity is buying, increasing ownership to roughly 75% of the stock, and providing a solid support base for the market. Institutional buying will likely increase in pace now that shares are at a long-term low.

The risk is that the tariff threat results in a more significant business contraction, leading analysts to continue lowering their price targets and institutions to reduce their exposure. 

J.B. Hunt's stock price can continue to fall. However, the market has become extended and is nearing a critical support target where a rebound is likely.

The critical support target is near $120 and will likely be reached in April.