Credit Suisse thinks the announcement by J.B. Hunt Transport Services (JBHT -2.8%) of a charge related to BNSF arbitration (SEC Form 8-K) could be a negative signal for margins in 2019, although the firm remain positive on the set-up for the upcoming year.
"Despite a ~20% pullback in the stock since the beginning of Q4, we continue to be bullish on JBHT given the ’19 EPS power and the improving return profile," writes analyst Allison Landry.
"Specifically, we recognize 1) the pipeline for DCS growth with 30+ new customers, 2) potential pricing power in ’19 as JBHT pulls the lever on price rather than volumes, and 3) Marketplace 360, which supports efficiency and asset utilization," she adds.
Credit Suisse keeps an Outperform rating on JBHT and price target of $148 (+50% upside potential).
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