J.B. Hunt Transportation Services (JBHT): A recovery is priced in, a return to structural growth is not (Upgrade to Outperform, $329)

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J.B. Hunt Transportation Services (JBHT): A recovery is priced in, a return to structural growth is not (Upgrade to Outperform, $329)

David Vernon +1 917 344 8333 david.vernon@bernsteinsg.com 9 July 2026

• Higher insurance rates due to nuclear verdicts and freight theft.

• Changes in broker liability rules that make it more risky for brokers to use non-compliant capacity.

• Higher fuel prices.

These supply side constraints are increasing demand for compliant drivers adding to further cost pressure. While high rates

(which mean higher wages for an owner / operator) are typically the best cure for high rates, increased enforcement of driver

training, closure of non-compliant driver training schools, and tighter restrictions on Commercial Driver License issuance

are going to make it harder to replenish the driver pool. As the economic recovery broadens (hopefully), there could also be

increased competition for labor from relatively more attractive blue collar jobs that could exacerbate the current problem.

Inflection in earnings power is significant, and lagged to the broader truck market. Times are good for JBHT now, they will get

better as box turns improve in the broader intermodal market catalyzing rates to move higher. Intermodal unit economics remain

depressed relative to prior peaks, and should improve as JBHT leverages idle capacity and eventually realizes pricing gains. The

amount of excess capacity in the network makes the case that historical leverage to contract truck rates is understated, and

on a unit basis intermodal profits are well below where they should be at this level of contract truck rates (Exhibit 2). Excess

capacity should mean that that incremental margins in the segment will recover quickly as volume returns to the market, one of