A Look at J.B. Hunt (JBHT) Valuation as Bullish Sentiment Builds Before Q4 Earnings Release

J.B. Hunt Transport Services (JBHT) heads into its upcoming Q4 earnings with expectations running higher than usual, following a strong Q3 and a clear uptick in bullish options activity around the stock.

See our latest analysis for J.B. Hunt Transport Services.

The strong Q3 surprise and recent bullish options flow have helped fuel a sharp rebound. J.B. Hunt’s roughly 50 percent 3 month share price return signals that momentum is clearly building rather than fading.

If this kind of move has you wondering what else is gaining steam, it could be worth exploring fast growing stocks with high insider ownership for more under the radar growth ideas backed by committed insiders.

Yet with JBHT now trading above the average analyst target and optimism running hot into Q4, investors face a key question: is this logistics leader still undervalued, or is the market already pricing in years of growth?

Most Popular Narrative Narrative: 14.7% Overvalued

Compared with the last close of $197.68, the most followed narrative points to a lower fair value, which sets up a clear tension around expectations.

The analysts have a consensus price target of $159.375 for J.B. Hunt Transport Services based on their expectations of its future earnings growth, profit margins and other risk factors. However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of $180.0, and the most bearish reporting a price target of just $133.0.

Read the complete narrative.

Want to see why steady revenue growth, rising margins and a lower future earnings multiple still produce a rich valuation? The narrative’s math may surprise you.

Result: Fair Value of $172.39 (OVERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, stubbornly weak freight demand and ongoing pricing pressure could quickly squeeze margins and challenge the idea that recent cost gains are sustainable.

Find out about the key risks to this J.B. Hunt Transport Services narrative.

Another Way of Looking at Value

While the narrative driven fair value pegs J.B. Hunt at $172.39, our DCF model points to a higher fair value of about $214.25, suggesting the shares could still be roughly 8 percent undervalued even after the big run. Which set of assumptions appears more realistic to you?

Look into how the SWS DCF model arrives at its fair value.

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out J.B. Hunt Transport Services for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover 907 undervalued stocks based on their cash flows. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.

Build Your Own J.B. Hunt Transport Services Narrative

If you see the story differently or want to stress test the assumptions yourself, you can build a custom narrative in minutes: Do it your way.

A great starting point for your J.B. Hunt Transport Services research is our analysis highlighting 3 key rewards and 2 important warning signs that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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