Here's Why Investors Should Give J.B Hunt Stock a Miss Now

 J.B Hunt Transportation JBHT is grappling with significant challenges prevailing in the freight market. Weak liquidity is further hurting the company’s prospects, making it an unattractive choice for investors’ portfolios.

Let’s delve deeper.

JBHT: Key Risks to Watch

Southward Earnings Estimate Revision:The Zacks Consensus Estimate for the current-quarter earnings has been revised 8.7% downward over the past 60 days and is pegged at $1.36 per share. Meanwhile, the Zacks Consensus Estimate for 2025 earnings is pegged at $5.75 per share, indicating a 9% fall over the past 60 days.

The unfavorable estimate revision indicates brokers’ lack of confidence in the stock.

Dim Price Performance:The company’s price trend reveals that its shares have fallen 12.8% year to date compared with the Transportation - Truckindustry’s 12.7% decline.

Weak Zacks Rank: JBHT currently carries a Zacks Rank #4 (Sell).

Unimpressive Earnings Surprise History: JBHT has a discouraging earnings surprise history, having surpassed the Zacks Consensus Estimate in two of the trailing four quarters and missing twice. The average negative surprise is 2.9%.

Bearish Industry Rank: The industry to which J.B. Hunt Transport Services belongs currently has a Zacks Industry Rank of 244 (out of 245). Such an unfavorable rank places it in the bottom 1% of Zacks Industries.Studies show that 50% of a stock 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 outclass a robust stock in a weak industry. Reckoning the industry’s performance becomes imperative in this case.

Headwinds: J.B Hunt Transportation is grappling with significant challenges in the freight market, as total operating revenues declined 1% to $2.92 billion in the first quarter of 2025 from $2.94 billion in the March-end quarter of 2024. While the drop is slight, key segments show deeper strain. Dedicated Contract Services saw a 5% reduction in average truck count, and Final Mile Services experienced a 15% decline in stops, signaling weaker demand. Integrated Capacity Solutions reported 13% fewer loads, while Truckload faced an 8% drop in gross revenue per load. These declines reflect broad-based pressure from a soft freight environment and competitive pricing.

Moreover, the company’s financial stability is under pressure, as reflected by a declining current ratio (a measure of liquidity). JBHT’s current ratio fell from 1.41 in 2022 to 1.35 in 2023, and dropped further to 1.06 in 2024. This consistent downward trend is concerning, as it raises questions about the company’s ability to meet its short-term debt obligations. In the first quarter of 2025, the current ratio is pegged at 0.89.

Stocks to Consider

Investors interested in the Transportation sector may also consider Copa Holdings CPA and Ryanair RYAAY.

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

CPA has an expected earnings growth rate of 14.3% 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 5.5%. Shares of CPA have risen 21.1% year to date.

RYAAY currently sports a Zacks Rank of 1.

RYAAY has an expected earnings growth rate of 30.5% for the current year. The company has a mixed earnings surprise history. Its earnings outpaced the Zacks Consensus Estimate in two of the trailing four quarters and missed twice, delivering an average beat of 46.6%. Shares of RYAAY have rallied 28.5% year to date.

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

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