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J.B. Hunt Drives to a New High on Strong Quarterly Showing

JBHT saw its fourth-quarter earnings jump 25%

by 1/27/2012 11:00:09 AM
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With corporate earnings season already in high gear, J.B. Hunt Transport Services, Inc. (JBHT - 50.70) joined the pack and unveiled its fourth-quarter results after the close last night. The Lowell, Ark.-based company said its profit jumped 25% to $72.6 million, or 61 cents per share, from $57.9 million, or 46 cents per share, in the year-ago quarter. Operating revenue increased 18% to $1.2 billion. JBHT's results were stronger than expected, as Wall Street was calling for a profit of 58 cents per share on $1.19 billion in revenue.

Traders are applauding JBHT's performance, and have pushed the shares to a new all-time high of $51.90 early in the session. This surge has amplified the stock's 9.4% year-to-date climb. At last check, the shares have soared above the $49-$50 area, which had provided a staunch technical lid since April 2011.

Weekly

Checking out the sentiment backdrop, it seems that negativity is prevalent toward JBHT. During the past month, short interest on the security fell 14.3%. However, these bearish bets still account for a healthy 4.3% of the equity's available float. In fact, at JBHT's average pace of trading, it would take nearly one week's worth of trading to buy back all of these pessimistic positions.

Elsewhere on the Street, options traders appear to hold a downbeat view of JBHT as well. During the past 10 days, speculators on the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) have bought to open 21.10 puts for every call. This ratio arrives in the 94th percentile of its annual range, signaling that traders on these exchanges have rarely purchased bearish bets over bullish at a faster pace during the past year.

Furthermore, the JBHT's Schaeffer's put/call open interest ratio (SOIR) of 2.44 indicates that puts more than double calls among options slated to expire within three months. This ratio ranks in the 98th percentile of its annual range, suggesting that short-term options players have seldom been more put-heavy during the past year.

However, it appears that the tides could be turning. Following JBHT's well-received results, at least three brokerages weighed in on JBHT: Citigroup boosted its price target by $13 to $55; Dahlman Rose lifted its target to $54 from $49; and Raymond James upped its price target by $9 to $56.

Should the shares continue to exceed expectations, there could be additional target hikes in store for JBHT. Thomson Reuters places the average 12-month price target at $49.73, which represents a discount to the stock's current price of $50.70.

Considering JBHT's inspiring performance on and off the charts, an unwinding of skepticism among analysts or traders could give the trucking issue the push it needs to extend its trek into new-high territory.

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