Shares of delivery company J.B. Hunt Transport Services (JBHT) fell more than 2.7% on Tuesday after receiving a downgrade from analysts at Bank of America, who lowered their price target to neutral from buy and cut their one-year price target on the stock to $95.
J.B. Hunt stock was down 2.7%, or $2.42, at $86.84 in mid-afternoon trading on the Nasdaq Stock Market after Bank of America warned of a tougher road ahead for the trucking and transportation company amid higher general rail costs as well as shifting traffic patterns.
"Given secular headwinds of higher rail costs, shifting traffic patterns and refined rail lanes from Precision Scheduled Rail models, we believe volumes and JBHT's multiple may face sustained pressure versus historical levels, particularly as truckload stocks have retreated to an 11 times average on 2019, from upper-teens over the past year," Bank of America said in a note to clients.
To be sure, other analysts see opportunity for J.B. Hunt, among them TheStreet.com Real Money contributor Paul Price, who last month noted that even with lowered guidance from management, the company is still looking to surpass last year's record earnings.
"Analysts fall all over themselves explaining why they are cheap, and deserve to go even lower. They downgrade names they loved at much higher prices after often-insignificant news," wrote Price. "That appears to be the case right now with trucking company J.B. Hunt."