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Bear of the Day: J.B. Hunt Transport (JBHT)

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J.B. Hunt Transport (JBHT - Free Report)  is a Zacks Rank #5 (Strong Sell) that is a provider of transportation services in the United States, Canada and Mexico. The Arkansas based company operates in four segments, which give it some diversification. This has helped the stock hold up despite tough times in the logistics business. However, earnings and analyst outlooks do not look good going forward.  

Big Miss on Q4

The company reported in January, seeing an 11% miss on earnings. While the stock dropped initially, the company raised its dividend 3.8%, bringing in some buyers. Since EPS, the stock has remained at pre-earnings levels, despite a negative atmosphere in the industry.

Shares of JBHT are up over 30% from April of last year. But with falling estimates, investors have to be asking themselves why they would hold going forward.

Over the last 30 days, analysts have dropped their current year estimates from $5.90 to $5.64, or 4.4%. The current quarter is even more concerning, with estimates falling 9% in the same timeframe. If the trend continues and the trucking market doesn’t turn around, it could be tough times for J.B. Hunt investors.

Trucking Recession

Despite the booming economy, trucking is still struggling. The Cass Index, which measures monthly freight expenditures and volumes, was down 6.4% quarter over quarter in January and 7.9% year over year. China being offline due to the trade war is one reason, but the abnormal market is hitting logistic companies hard. The trucking segment from JB was down 20% year over year.

Looking forward, the shutdown in China due to the Coronavirus might hurt short-term as certain parts of China continues to be shutdown. While longer-term J.B. Hunt might come out a winner, investors should avoid the long side for now.

In Summary

J.B Hunt has held up well, while other logistics companies have seen falling stock prices. Investors should be avoid J.B. Hunt in 2020, or until trucking sees some positive momentum. 

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J.B. Hunt Transport Services, Inc. (JBHT) - free report >>