From 24/7 Wall St. · Omor Ibne Ehsan · · 1m 10s
Diesel Spike Eats J.B. Hunt's Quarter
J.B. Hunt's stock tumbles as diesel hits $6.45, but analysts hold firm on recovery by year-end
In brief
J.B. Hunt's stock tumbles as diesel hits $6.45, but analysts hold firm on recovery by year-end J.B. Hunt's Q3 earnings gap stems from diesel price lagging behind surcharge resets, not permanent cost issues Originally reported by 24/7 Wall St..
Diesel at $6.45
Diesel prices hit $6.45 a gallon, the highest in company history, but J.B. Hunt's stock dropped 13% in one day.
“Diesel has climbed past six dollars a gallon”
Costs Outpace Prices
Driver costs and fuel expenses are rising faster than J.B. Hunt can pass costs to customers through fuel surcharges.
“Costs are arriving faster than prices”
Analysts Still Bullish
Analysts target $298.48 for J.B. Hunt, but the stock trades at $234.25, leaving a $64 gap.
“The Street target of $298.48 sits well above the current quote”
Q3 Earnings Gap
J.B. Hunt's Q3 earnings will fall versus Q2 due to driver costs and diesel prices hitting $6.45.
“CFO Brad Delco told investors third-quarter earnings would fall versus the second quarter”
Intermodal Fix
Intermodal fuel surcharges reset with a lag, but new bids in Q4 should close the gap between pricing and costs.
“Delco called it a timing mismatch because intermodal fuel surcharges reset with a lag”
Peer Comparison
Old Dominion Freight Line and XPO improved margins by raising prices faster than J.B. Hunt's costs.
“Old Dominion Freight Line leaned into pricing”
The Deciding Factor
If diesel stays near $6.45 and intermodal bids reset in Q4, J.B. Hunt's Q3 shortfall becomes a temporary lag.
“The deciding variable is diesel's behavior over the next few weeks”
The short version
J.B. Hunt's Q3 earnings gap stems from diesel price lagging behind surcharge resets, not permanent cost issues
