BMO Capital analyst Fadi Chamoun reiterated a Hold rating on Hub Group (HUBG – Research Report) yesterday and set a price target of $45.00.
Fadi Chamoun has given his Hold rating due to a combination of factors impacting the Hub Group, notably the intermodal market’s competitiveness and the truckload market’s persistent excess capacity. The first quarter results surpassed expectations with stronger performance in logistics, but the company adjusted its guidance downwards, indicating a less optimistic revenue and earnings outlook than previously anticipated. This revision reflects the challenges Hub Group faces, including intense competition that is likely to continue affecting the pricing dynamics unfavorably.
Chamoun also points out that while there have been improvements in intermodal volumes and rail service levels, the overall growth and margin enhancement for Hub Group is hampered by the need for a more balanced trucking market. Despite taking market share and achieving network balance, the company expects pressure on revenue per load to persist, which undermines the potential recovery in the second half of the year. These headwinds, along with weaker pricing trends and the reduced full-year revenue and EPS outlook, underpin Chamoun’s rationale for maintaining a Hold rating on HUBG’s stock.
According to TipRanks, Chamoun is a 5-star analyst with an average return of 15.0% and a 63.38% success rate. Chamoun covers the Industrials sector, focusing on stocks such as United Parcel, Bombardier, and CAE.
In another report released today, Stephens also maintained a Hold rating on the stock with a $42.00 price target.
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Hub Group (HUBG) Company Description:
Hub Group, Inc. is a transportation management company, which engaegs in the provision of intermodal, truck brokerage, and logistics services. It operates through the Hub and Mode segments. The Hub segment offers comprehensive intermodal, truck brokerage, and logistics services. The Mode segment markets and operates its freight transportation services, consisting of intermodal, truck brokerage, and logistics. The company was founded by Phillip C. Yeager in 1971 and is headquartered in Oak Brook, IL.
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