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After nearly two years of declining revenue and earnings, J.B. Hunt Transport Services (JBHT) is hopeful for brighter days ahead. J.B. Hunt reported its latest quarterly results and using LSEG StreetEvents Transcript data, we take note of the declaration from management that we are at or near the end of the worst freight recession ever experienced. Our approach leverages a structured process to analyze earnings call, extracting key insights, and have identified that the company highlighted an increase in both volumes and customer counts, along with two consecutive quarters of record intermodal volume. Rail peers including CSX and Union Pacific (UNP) also shared improving numbers around intermodal demand in their latest earnings call.

In this note, we take a closer look at J.B. Hunt’s latest earnings result using LSEG Workspace. We round out insights from our StarMine models, macroeconomic data from Datastream, and assess market trends from both Lipper Fund Flows and Yield Book to provide a holistic view into the sector.

A look at the numbers and margins

J.B. Hunt reported its Q4 earnings on January 15th, with revenue of $3.147 billion, narrowly surpassing the consensus estimate of $3.146 billion. However, earnings per share (EPS) came in at $1.53, missing expectations of $1.61.

This marks the continuation of a two-year decline in both revenue and earnings, following the company’s record-breaking performance in 2022, when J.B. Hunt achieved an all-time high revenue of $14.8 billion and EPS of $9.21.

Longer-term, J.B. Hunt is positioned for growth according to analyst expectations from LSEG I/B/E/S. The company is forecasted to achieve a compound annual growth rate (CAGR) of 5.6% in revenue and an even stronger 19.5% CAGR in earnings per share (EPS) from FY3 (2027) to FY0 (2024). For investors seeking growth at a reasonable price (GARP), J.B. Hunt currently trades at a forward price-to-sales (P/S) ratio of 1.3x and a price-to-earnings (P/E) ratio of 25.1x, both above its 10-year averages of 1.4x and 21.2x, respectively.

Exhibit 1: Historical and Forecasts for Revenue and EPS

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The intermodal segment remains the backbone of J.B. Hunt’s business, accounting for 49% of total revenues. Analyst projections indicate steady growth in this segment, with revenue expected to reach $6.1 billion in 2025, followed by $6.6 billion in 2026 and $7.1 billion in 2027.

J.B. Hunt operates within the Transportation Industry Group, which is poised for 14.4% earnings growth this year, according to LSEG Proprietary Research, who publish the S&P 500 Earnings Scorecard. This robust forecast places transportation as the fifth highest-growing industry among the 25 industry groups tracked in the S&P 500.

Valuation metrics suggest a neutral stance, with J.B. Hunt holding a StarMine Relative Value (RV) score of 42. However, when compared to its sub-industry peers (Road & Rail), the RV score rises to 55, indicating greater relative expensiveness within its peer group.  The company has a P/E component ranking of 29 (global rank), indicating it trades at a relative premium.This is evidenced by J.B. Hunt’s forward P/E of 25.3x, compared to 17.5x for the Datastream World Index.

Management has made margin recovery a key focus for 2025, with CEO Shelley Simpson emphasizing the goal of growing and repairing margins in the coming years. Currently, J.B. Hunt operates at a gross margin of roughly 13%, while net margin in 2024 sits at 4.7%—an eight-year low. However, forecasts suggest a steady improvement, with net income expected to grow annually, reaching a record $1.04 billion in 2028. This aligns with expectations for net margins to rise to 5.1% in 2025, 5.9% in 2026, and 6.4% in 2027.

Exhibit 2: Historical and Forecast Margins

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StarMine Analytics: A Divide Between Sell-Side and Buy-Side Sentiment

J.B. Hunt’s outlook presents an intriguing contrast between sell-side skepticism and buy-side potential. According to StarMine models, analyst sentiment remains largely negative, but the company’s underlying fundamentals suggest it could become increasingly attractive to institutional investors.

Sell-side analysts are not yet convinced of a turnaround, as reflected by the StarMine Analyst Revision Model (ARM), who ranks J.B. Hunt a score of 20 (percentile rank from 1-100). Over the past 30 days, J B Hunt’s ARM has declined by 11 points.

ARM consolidates changes in revenue, EBITDA, and preferred earnings (EPS) across multiple time horizons, offering a comprehensive measure of revision trends.

Exhibit 3: StarMine Analyst Revision Model (ARM) for J.B. Hunt

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Source: LSEG Workspace

EPS expectations for Q1 2025 stand at $1.20, marking a 38.8% decline from a year ago. Looking ahead to full-year 2025, EPS estimates have fallen significantly, down 46% over the past two years ($11.70 two years ago vs. $6.32 today).

Revenue expectations tell a similar story. Year-over-year growth forecasts for Q1 2025 have declined sharply, from 110.5% (two years ago) to just 13.6% today. Additionally, FY 2025 revenue estimates have been revised downward by 20.2% over the past two years, while broader growth expectations have plummeted from 28.9% to just 2.9% over the same period.

LSEG Workspace displays both the blended mean change in analyst revisions (over a 90-day period) and the StarMine Predicted Surprise (PS%), which serves as a confirmatory signal for future earnings adjustments.

PS% compares the SmartEstimate—a weighted average favoring more accurate and timely analysts—to the broader consensus estimate. The model is particularly effective in identifying earnings surprises, correctly predicting their direction 70% of the time when PS% exceeds +2% or falls below -2%.

Exhibit 4: Analyst Revision Model (ARM) Component Scores

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Source: LSEG Workspace

Analyst sentiment is also bearish across the industry for J.B. Hunt’s peers, as shown on the ARM page within LSEG Workspace. The peer average ARM score stands at 31, with four companies in the group falling into the bottom quintile (scores below 25). Only one company has a bullish score (above 70).

Exhibit 5: Analyst Revision Model (ARM) scores for Peers

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Source: LSEG Workspace

ARM also factors in changes in recommendation levels, where we find that a handful of companies, including J.B. Hunt, have strong scores—indicating that analysts have been progressively upgrading their recommendations within the rating scale (i.e. range is from Strong Sell to Strong Buy).

The Recommendations and Price Target page for J.B. Hunt in LSEG Workspace visually tracks changes in recommendations over time, alongside analyst-level ratings and price targets. Among analysts with a recommendation score above three stars, only one analyst has a sell rating, while the top-rated analyst maintains a buy rating who highlighted ‘another strong quarter from J.B. Hunt. Aggressive buybacks a pleasant surprise’.  Management highlighted, “in 2024, we repurchased $514 million of stock at an average price of $169 per share. 2024 marks the second largest year for share repurchases in our company’s history.”

Exhibit 6: Recommendations and Price Targets for J.B. Hunt

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Source: LSEG Workspace

While sell-side analysts remain cautious on J.B. Hunt from a revision’s perspective, buy-side sentiment tells a more optimistic story. The StarMine Smart Holdings (SH) model assesses how a company is aligned to institutional investor preferences based on 25 fixed factors like volume, price momentum, profitability, value, growth, analyst revisions, and leverage. J.B. Hunt has a model score of 75. With scores above 70 considered bullish, this suggests that institutional investors may view the company as an attractive opportunity.

Exhibit 7: StarMine Smart Holdings for J.B. Hunt

Source: LSEG Workspace

The SH model is driven by two key components:

• Institutional Screening: evaluates whether a company aligns with current investor preferences. J.B. Hunt currently holds a neutral score in this category.
• Change Component: identifies shifts in company fundamentals that could make it more appealing to portfolio managers. J.B. Hunt ranks in the top decile for this metric and suggests that it is more likely to now appear on the radar of portfolio managers as they run their idea generation screens, making it a potential candidate for increased institutional accumulation.

Breaking down specific factors, J.B. Hunt stands out for its strong Return on Equity (ROE) and Return on Assets (ROA), both ranked in the 72nd percentile and are currently the third and eight most popular factors in the model. Additionally, the company has seen an increase in EPS Growth (This Year vs. Last Year), EPS Long-Term Growth Mean (LTG), and Revenue Growth (This Year vs. Last Year).

Exhibit 8: StarMine Smart Holdings Component Details for J.B. Hunt

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Source: LSEG Workspace

Overall, despite the pessimistic sell-side sentiment, the company appears to be warming up to buy-side institutions, driven by improving profitability metrics and improved growth outlook. This divergence suggests the company may be positioning itself for a potential re-rating as fundamentals strengthen.

A look at Manufacturing PMI and Trucking Aggregate Hours Worked

The potential end of the freight recession is being reinforced by improving macroeconomic indicators, painting a more optimistic outlook for the transportation sector. Using LSEG Datastream, a key signal of this recovery is the Manufacturing PMI, which crossed 50 last month for the first time in three years, marking a shift from contraction to expansion. Notably, manufacturing PMI has surprised to the upside for three consecutive months.

Further strengthening this outlook, the latest survey shows new orders at 55.5, reflecting robust demand and five consecutive months of improvement—the longest positive streak of any subcomponent. Since new orders are often a leading indicator of industrial activity, this sustained momentum suggests stronger production ahead, which could drive greater freight demand as more goods move through supply chains.

Exhibit 9: U.S. Manufacturing PMI Data

Another key indicator pointing to a potential freight recovery is strength in labor market data. According to the Bureau of Labor Statistics (BLS) non-farm payrolls report, aggregate weekly hours within the freight trucking sector have increased across the board over the past year. This growth spans multiple categories, including freight transportation arrangement, general freight trucking, specialized freight trucking, and long-distance trucking segments.

Exhibit 10: Non-Farm Payrolls: Weekly Hours Worked (Freight Trucking)

Rising labor demand in freight suggests that companies are expanding capacity in anticipation of higher volumes, aligning with broader signs of improving industrial activity. This trend, combined with strengthening PMI data and increasing new orders, reinforces a positive backdrop.

Funds flowing into Industrials (Lipper)

Investor sentiment toward the Industrials sector has markedly improved, with fund flows positive in four of the last five years using data from LSEG Lipper.In 2024, flows surged to $12.7 billion in 2024, up from $3.1 billion in 2023, marking the highest annual inflows since the post-global financial crisis. Furthermore, January 2025 marks the fourth consecutive month of positive flows into the sector.

While the data does not indicate a prolonged downturn—as there has only been one year of negative flows so far this decade—the strong 2024 rebound suggests renewed investor interest in Industrials. However, proposed tariffs directly targeting key industries within the sector introduce uncertainty, making it crucial to watch how these flows hold up in the coming year.

Exhibit 11: Lipper Fund Flows – Global Equity Sector (Industrials)

To help explain the sustained fund flows into Industrials, valuation and financial metrics suggest the sector remains attractive relative to historical trends. According to LSEG Datastream, the Datastream World Industrial Transportation Index currently trades at a forward P/E of 14.7x, down from its 2020 peak of 20.9x and now in line with its 10-year average of 15.6x.

Despite this valuation compression, fundamentals have strengthened, with free cash flow as a percentage of sales rising from 8.9% in 2013 to 14.4% today, peaking at 19.2% in 2023. Meanwhile, capital expenditures as a percentage of sales have remained within a stable range of 7-11% over the last decade, currently standing at 8.5%, while return on equity stands at 13.4%.

Exhibit 12: Datastream World – Industrials Transportation Index

The combination of reasonable valuations, improving free cash flow generation, and disciplined capital investment may be contributing factors behind the increasing investor confidence and the surge in fund flows seen over the last four years.

Industrial Real Estate Trends (Yield Book)

Insights from LSEG Yield Book show that industrial real estate has been the best-performing commercial property type with the lowest delinquency and special servicing rates post-COVID. Warehouses and distribution centers are benefiting from the rise of e-commerce and the growing demand for data centers, particularly driven by AI. However, there has also been an uptick in vacancy rates and a slowdown in rent growth due to elevated construction and new supply. The overall CMBS loan delinquency rate has risen rapidly (from 4.4% in January 2024 to 5.9% in January 2025), primarily due to office sector distress, while industrial delinquencies have remained stable, well below 1%.

Exhibit 13: CMBS 30+ Days Delinquency Rates

Given J.B. Hunt’s role in freight and logistics, the rise in warehouse vacancies and slowing rent growth could reflect a period of moderation in logistics demand following the post-pandemic e-commerce boom. However, the stability of industrial loan delinquencies suggests that the sector remains fundamentally strong, with continued demand from key industries. While supply chain pressures have eased, companies are now shifting focus toward ensuring long-term stability and resilience, particularly in response to potential trade disruptions and geopolitical risks. This shift may influence freight patterns and inventory strategies, potentially impacting warehouse utilization and industrial leasing trends.

Conclusion

While the freight industry has faced a prolonged downturn, multiple indicators now suggest that a sustained recovery may be underway. J.B. Hunt’s management has called the end of the freight recession, and key macroeconomic data—such as the Manufacturing PMI crossing 50 for the first time in three years and new orders rising for five consecutive months—supports this view. Labor market strength within freight, increasing fund flows into industrials, and sustained demand for industrial real estate all point to an encouraging backdrop for freight activity.

Despite lingering sell-side skepticism, institutional interest in J.B. Hunt may rise, with Smart Holdings data signaling increased alignment to buy-side factor preferences. The transportation industry is also expected to deliver one of the strongest earnings growth rates in 2025, further reinforcing the idea that conditions are improving.

With macro tailwinds strengthening and J.B. Hunt focused on margin recovery and long-term growth, investors will be watching closely to see if the company can capitalize on these favorable trends. If the momentum continues, the worst of the freight downturn may truly be in the rearview mirror.

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