Story updated at 10 a.m. to reflect market activity.
JB Hunt gained 0.7% to $72.80 in morning trading.
The analyst firm raised its price target for the trucking company to $89 from $83. The upgrade comes from new analyst Nicholas J. Bender who believes JB Hunt's margins can expand.
"We are transferring coverage of JB Hunt (JBHT) with a Buy rating and $89 price target," Bender wrote. "The company faced 2013 headwinds related to decelerating intermodal volume, contract start-up costs, a choppy brokerage market, and an underperforming truckload segment (JBT).
"However, operating margin looks poised to expand for both the intermodal (JBI) and dedicated (DCS) segments in FY14, and a December 2013 management shake-up at JBT should allow the company to benefit from improving TL fundamentals. We believe JBHT's current share price, at just 18.8x our FY15 EPS estimate of $3.85, undervalues the potential of the integrated, multi-modal operating model."
Separately, TheStreet Ratings team rates HUNT (JB) TRANSPRT SVCS INC as a Buy with a ratings score of A. TheStreet Ratings Team has this to say about their recommendation:
"We rate HUNT (JB) TRANSPRT SVCS INC (JBHT) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its revenue growth, growth in earnings per share, largely solid financial position with reasonable debt levels by most measures, notable return on equity and increase in net income. We feel these strengths outweigh the fact that the company shows low profit margins."