J.B. Hunt shares plummet as Q1 profit declines amid higher costs and contract weakness

Shares of J. B. Hunt Transport Services (NASDAQ:JBHT) experienced a sharp decline in premarket trading today, falling by 6.62% to $126, following the release of its first-quarter earnings report.

The transportation giant announced a 7.6% drop in profit for the first quarter, attributing the decrease to higher operating costs and weakness in its contract services sector.

Despite the profit dip, J.B. Hunt reported Q1 revenue of $2.92 billion, slightly surpassing analysts' estimates of $2.90 billion, according to data compiled by LSEG.

The disappointing earnings report has prompted a wave of concern among analysts, with at least five brokerages reportedly cutting their price targets for the stock.

Concerns about the broader economic outlook and pricing pressures within the intermodal sector appear to be weighing on analyst sentiment.

"We are lowering our estimates in recognition of elevated macro uncertainty and to reflect potential downside risk to intermodal volumes," stated BMO Capital Markets.

Similarly, Stephens noted the competitive landscape, stating, "Intermodal bid season has been competitive, and we are now expecting less price growth this year."

Despite the recent negative news, a majority of analysts still maintain a positive outlook on J.B. Hunt.

According to LSEG data, 16 out of 26 brokerages currently rate the stock as a "buy" or higher, with 9 rating it as a "hold" and only one recommending a "sell."

The median price target among these analysts stands at $165.