Key Takeaways:
- The 2-Minute Valuation Model values J.B. Hunt at $155 per share in 2 years.
- That’s a potential 22% upside from today’s price of about $127/share.
- J.B. Hunt’s normalized EPS is projected to grow 50.7% over the next three years.
- Get accurate financial data on over 100,000 global stocks for free on TIKR >>>
As the transportation industry navigates through macro challenges and technological transformation, J.B. Hunt Transport Services (JBHT) stands out as one of the most diversified and well-positioned players in the sector.
With its integrated multimodal capabilities spanning truckload, intermodal, dedicated contract services, and final mile delivery, J.B. Hunt has built a resilient business model that can adapt to changing market conditions.
Despite facing a significant earnings contraction in 2024, the company is projected to experience a strong recovery beginning in 2025, driven by volume improvements, pricing power, and operational efficiencies.
This resurgence story presents an intriguing opportunity for investors looking to capitalize on the transportation market’s eventual rebound.
With projected annualized returns of 10.5% over the next two years based on very conservative estimates, J.B. Hunt could offer a compelling risk-reward profile for those willing to look beyond near-term industry challenges.
Here’s our detailed valuation analysis.
Find the best stocks to buy today with TIKR (It’s free) >>>
What is the 2-Minute Valuation Model?
Three core factors drive a stock’s long-term value:
- Revenue Growth: How big the business becomes.
- Margins: How much the business earns in profit.
- Multiple: How much investors are willing to pay for a business’s earnings.
Our 2-Minute Valuation Model uses a simple formula to value stocks:
Expected Normalized EPS * Forward P/E ratio = Expected Share Price
Revenue growth and margins drive a company’s long-term normalized earnings per share (EPS), and investors can use a stock’s long-term average P/E multiple to get an idea of how the market values a company.
Why JBHT Stock Looks Undervalued
Forecast
Based on the EPS growth chart, J.B. Hunt is projected to experience significant earnings growth over the next few years.
Its normalized EPS is expected to increase from $5.56 in 2024 to $8.38 by 2027, representing a 50.7% growth over this period.
This trajectory suggests that after an earnings decline in 2024, J.B. Hunt is expected to return to growth in 2025, with acceleration in 2026 and sustained momentum in 2027.
This earnings growth for JBHT stock is likely to be driven by:
- Intermodal Growth: As rail service metrics improve and shippers increasingly focus on sustainability, J.B. Hunt’s market-leading intermodal segment is positioned for volume recovery and margin expansion.
- Dedicated Contract Services Stability: The company’s dedicated segment provides stable revenue streams and consistent margins, acting as a buffer during cyclical downturns in the spot freight market.
- Digital Transformation: J.B. Hunt’s continued investment in its 360 technology platform enhances operational efficiency and customer experience, creating a competitive advantage in freight matching and capacity utilization.
- Multimodal Integration: An ability to offer customers multiple transportation solutions creates cross-selling opportunities and deeper customer relationships, supporting both volume growth and pricing power.
- Strategic Capacity Management: J.B. Hunt’s disciplined approach to fleet management and driver recruitment helps maintain operational efficiency through market cycles.
View JBHT’s full analyst estimates (It’s free) >>>
Is JBHT Stock a Value Buy?
J.B. Hunt has historically traded at an average forward P/E multiple of 23.22x, as shown in the historical P/E chart. JBHT’s stock has traded as high as 29.5x earnings and as low as 16.1x earnings, with a current P/E ratio of approximately 21.5x.
The current P/E is slightly below the historical average, suggesting the stock may be moderately undervalued relative to its own trading history.
For our valuation, we’ll use a forward P/E multiple of 18x, which is below the historical average to maintain a conservative approach given the near-term challenges in the transportation sector.
Fair Value of JBHT Stock
Using our 2-Minute Valuation Model and applying a conservative approach:
- Conservative 2027 EPS estimate: $8.38
- Conservative forward P/E multiple: 18x
- Projected Dividends over the next 2 years: $3.6
Expected Normalized EPS ($8.38) * Forward P/E ratio (18x) + Dividends ($3.6) = Expected Share Price ($155)
The 2-year expected JBHT stock price we would get from this valuation is $155 per share.
It’s important to note that the stock could easily offer more upside, as some models might have the stock trading above 20 times earnings over the long term. This would add over 10% upside to the stock today.
With JBHT stock currently trading at around $127, this implies a potential upside of approximately 22% over the next two years or an annualized return of about 10.5%.
Keep in mind, this is just a valuation exercise, and we don’t know for sure what the stock’s price will be in the future.
Value stocks like J.B. Hunt quicker with TIKR (It’s free) >>>
What is the Target Price for JBHT Stock?
Analysts also have an average price target of around $155 per share for JBHT stock, indicating they see nearly 22% upside for the stock from its current levels.
Analysts also think JBHT stock looks undervalued today:
Risks to Consider
While our valuation suggests meaningful upside, investors should be aware of several risks:
- Prolonged weakness in freight demand
- Rising driver compensation and recruitment costs
- Fuel price volatility
- Competition from both traditional carriers and digital freight platforms
- Potential economic recession that could impact transportation volumes
TIKR Takeaway
J.B. Hunt presents an attractive opportunity for investors seeking exposure to the transportation sector’s recovery.
As one of the most diversified and technologically advanced players in the industry, the company is well-positioned to navigate near-term challenges while capitalizing on long-term growth opportunities in multimodal freight transportation.
Our analysis suggests a potential 22% return over the next two years, which translates to a 10.5% annualized return. The stock could easily have more upside if it trades closer to its long-term average valuation multiple.
For investors with a longer time horizon, J.B. Hunt’s strong competitive position and integrated business model offer compelling value at current levels.
Is JBHT stock a buy over the next 24 months? Use TIKR to check the stock’s analyst price targets and growth forecasts to see if the stock is undervalued today.
Looking for New Opportunities?
- See what stocks billionaire investors are buying so you can follow the smart money.
- Analyze stocks in as little as 5 minutes with TIKR’s all-in-one, easy-to-use platform.
- The more rocks you overturn… the more opportunities you’ll uncover. Search 100K+ global stocks, global top investor holdings, and more with TIKR.
Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any stocks mentioned. Thank you for reading, and happy investing!
