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Susquehanna analyst Bascome Majors raised the firm's price target on Hub Group to $108 from $105 and keeps a Positive rating on the shares. The analyst said the cyclical versus structural earnings power debate is unlikely to be solved by anything but time and execution.
Cowen analyst Jason Seidl raised the firm's price target on Hub Group to $133 from $121 and keeps an Outperform rating on the shares. The analyst said results came in above our forecast and consensus expectations in 4Q even as intermodal volumes experience double-digit declines; a soft start to the year puts volumes weighted in 2H while roll over pricing aids 1H.
Baird analyst Garrett Holland raised the firm's price target on Hub Group to $108 from $96 and keeps an Outperform rating on the shares. The analyst said the structural improvement in gross margin and asset-light business mix along with recovering intermodal volume should result in more resilient earnings trends.
Reports Q4 revenue $1.29B consensus $1.39B. "Hub Group had a record year in 2022, delivering 26% revenue growth while more than doubling our earnings per share. We grew ITS to over $3 billion in revenue and grew both Brokerage and Logistics to $1 billion in revenue, while we supported our customers with high service levels and innovative supply chain solutions. Our strategy of service line diversification, and our focus on transportation cost containment, yield improvement and operating efficiency led to a significant increase in profitability. Market conditions softened during the quarter, but we anticipate demand will return by mid-2023. We remain focused on managing our costs and capital structure, while supporting our customers with great service and investing for growth to drive success in a variety of market conditions," said Phil Yeager, Hub Group's President and Chief Executive Officer.
Barclays analyst Brandon Oglenski raised the firm's price target on Hub Group to $80 from $75 and keeps an Equal Weight rating on the shares. The Q4 transport results are likely to be soft given deteriorating fundamentals at the end of 2022, but the potential for destocking and bottoming in truck pricing later in 2023 "could provide ample green shoots for value investors," Oglenski tells investors in a research note.
UBS analyst Thomas Wadewitz downgraded Hub Group to Neutral from Buy. The firm's analysis of intermodal pricing and accessorial revenue points to an estimated decline in revenue per load excluding fuel of 10% for Hub Group in 2023, which, along with cyclical pressure in its brokerage business, drives an expectation of a significant cyclical decline in EPS, Wadewitz tells investors in a research note.
Baird analyst Garrett Holland told investors while 2022 was the year to discount recessionary freight trends, 2023 is likely one where investors position more for recovery. He believes sustained volatility should be a common thread though and that first half 2023 trends will likely remain challenging with weaker-than-expected demand driving the downside risk for estimates. However, spot market pricing should find equilibrium, and by 2H23, bottoming demand trends should be evident. He said top ideas for 2023 are Knight-Swift (KNX), Schneider National (SNDR), Werner (WERN), Hub Group (HUBG), and Jack Henry (JKHY).
Hub Group announced that, as part of a planned succession process, its Board of Directors approved several leadership changes that will become effective January 1, 2023. After serving as Chief Executive Officer of Hub Group for twenty-six years, David Yeager will retire as CEO while continuing in the role of Executive Chairman of Hub Group. In his new role, David Yeager will work closely with the new CEO to facilitate a seamless leadership transition and continue to drive the next phase of the Company's growth. Phillip Yeager, currently President and Chief Operating Officer of Hub Group, will succeed David Yeager as the Company's President and Chief Executive Officer. In his new role, Phil Yeager will join the Board of Directors of Hub Group effective January 1, 2023. Phil Yeager joined Hub Group in 2011 and has held leadership roles in several of the Company's operations. In addition, Hub announced several other leadership changes effective January 1, 2023. Brian Alexander will be promoted from Executive Vice President, Logistics to Chief Operating Officer. Brian Meents will be promoted from Executive Vice President, Account Management, Sales and Marketing to Chief Marketing Officer. Chris Hoffmeister will be promoted from Executive Vice President, Account Management to Chief Commercial Officer.
