J.B. Hunt Transport Services, Inc. JBHT is currently mired in multiple headwinds, significantly hampering its prospects, thereby making it an unimpressive investment option.

Let’s delve deeper.

JBHT: Key Risks to Watch

Southward Earnings Estimate Revision: The Zacks Consensus Estimate for current-quarter earnings has moved 0.8% south in the past 60 days. For the current year, the consensus mark for earnings has been revised to 0.8% downward in the same time frame. The unfavorable estimate revisions indicate brokers’ lack of confidence in the stock.

Dim Price Performance:  The company’s price trend reveals that its shares have plunged 20.2% over the past year compared with the industry’s 9.9% decline.

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Weak Zacks Rank and Style Score: JBHT currently carries a Zacks Rank #4 (Sell). The company’s current Value Score of C shows its unattractiveness.

Unimpressive Earnings Surprise History: JBHT has a discouraging earnings surprise history, having missed the Zacks Consensus Estimate in three of the trailing four quarters (surpassed the same in the remaining quarter). The average negative earnings surprise is 8.4%.

Bearish Industry Rank: The industry to which JBHT belongs currently has a Zacks Industry Rank of 216 (out of 246). Such an unfavorable rank places it in the bottom 19% of Zacks industries. Studies show that 50% of a stock’s price movement is directly related to the performance of the industry group it belongs to.

A mediocre stock within a strong group is likely to outperform a robust stock in a weak industry. Reckoning the industry’s performance becomes imperative.

Headwinds: J.B. Hunt is grappling with significant challenges rising from the lower volumes and reduced revenue per load in key segments like DCS, ICS, JBT and FMS, hurting the top line. As a result, JBHT’s 2024 revenues declined 5.8% year over year. Moreover, fuel surcharge revenues fell 17.4%, though excluding this, core revenues still dropped 3.8%, reflecting broader challenges in operational performance and market conditions.

Higher net interest expense (owing to higher interest rates and debt issuance cost) is likely to mar J.B. Hunt’s bottom line. The company’s weak cash position is worrisome. JBHT's cash and cash equivalents were $46.98 million at the end of the fourth quarter of 2024, much lower than the short-term debt of $500 million. This implies that the company does not have sufficient cash to meet its debt obligations.

Stocks to Consider

Investors interested in the Transportation sector may also consider SkyWest SKYW and Frontier Group ULCC.

SkyWest currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

SKYW has an expected earnings growth rate of 16% for the current year. The company has an impressive earnings surprise history. Its earnings outpaced the Zacks Consensus Estimate in each of the trailing four quarters, delivering an average beat of 16.7%.

Frontier Group carries a Zacks Rank of 2 at present. ULCC has an expected earnings growth rate of more than 300% for the current year.

The company has an encouraging track record regarding earnings surprise, having surpassed the Zacks Consensus Estimate in three of the trailing four quarters and missing once. The average surprise was 1.1%.

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J.B. Hunt Transport Services, Inc. (JBHT) : Free Stock Analysis Report

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This article originally published on Zacks Investment Research (zacks.com).

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