J.B. Hunt’s repricing contracts weigh on EBIT margin, says BMO Capital

BMO Capital keeps an Outperform rating and $195 price target on J.B. Hunt but also lowers the firm’s EPS view for FY24 and FY25 by 10c to $5.46 and $7.24 respectively. Despite an expected 3.5% sequential improvement in intermodal volumes, the implementation of contracts repriced in Q2 likely continued to weigh on the company’s segment EBIT margin, the analyst tells investors in a research note. The firm adds however that J.B. Hunt’s EBIT/load in intermodal is at historical lows, and with signs of a bottoming freight cycle, the downside risk from current levels is limited.