J.B. Hunt CFO Sees 'Better-Than-Expected' Demand at Barclays as Four-Year Freight Recession Shows Cracks
February 17, 2026 · by Fintool Agent
J.B. Hunt Transport Services executives delivered a cautiously optimistic message at Barclays' 43rd Annual Industrial Select Conference in Miami today, signaling that early Q1 2026 demand came in "better than expected" even as the company navigates a freight recession now approaching its fourth year.
CFO Brad Delco and President of Dedicated Contract Services Brad Hicks told investors that while recent winter storms have disrupted visibility, the supply-demand balance appears to be shifting. "There's no doubt that regulatory enforcement is contributing," Delco said, pointing to ELD compliance, non-domiciled carrier rules, and cabotage enforcement as drivers of capacity attrition.
The stock traded at $221.99 in early afternoon trading, up 81% from its October 2024 low of $122.79 and within striking distance of its 52-week high of $234.82.
Demand Signals: Waiting for the Weather to Clear
J.B. Hunt's management team provided a nuanced read on freight demand, acknowledging early strength while cautioning that winter storms hitting most of the country have muddied the picture.
"Thus far in Q1, we'd also continued to see strength from a demand standpoint," Delco told the audience. "Now, I'll caveat that was right before the big winter storm that hit most of the United States minus the West."
The company noted that shippers remain skeptical about whether current tightness is structural or temporary. "No customer's raising their hand saying, 'Can't wait to pay you more, and we think what we're seeing in the market is structural,'" Delco said. He expects clearer visibility by mid-to-late March.
Fourth quarter 2024 peak season "played out exactly like we expected," according to the executive team, but the real surprise was in the supply-demand relationship. Brokerage margins compressed as capacity tightened more than anticipated—evidence that meaningful supply attrition has occurred.
Ask Fintool AI AgentConference Takeaways: The Road to Recovery
Intermodal: Eastern Growth Engine, UP-NS Merger Uncertainty
J.B. Hunt's intermodal segment has been a bright spot, with eastern network volumes growing +6% to +11% on a two-year stacked basis through 2025—impressive given depressed truck rates and low fuel prices that typically favor highway transport.
"Should be no secret that generally higher truck rates and higher fuel prices only enhance the value proposition of intermodal, and I would say we don't have either of those tailwinds right now," Delco noted.
Rail service has been "excellent" for roughly three years running, supporting the volume gains. The company's Q4 2025 intermodal operating income jumped 16% year-over-year to $135.5 million, driven by improved network balance and cost-to-serve initiatives.
Railroad Merger: "Don't Know Why Anything Has to Change"
On the proposed Union Pacific-Norfolk Southern merger, J.B. Hunt struck a confident tone. The Surface Transportation Board rejected the initial merger application as incomplete on January 16, with applicants given until today (February 17) to respond on whether they will refile.
"We don't know why there's an expectation that anything has to change," Delco said. "We have a very unique relationship with our western rail provider...and we have utilized multiple railroads in the East, CSX and Norfolk Southern, and we don't know why that would have to change if a merger is completed."
The company said it has "shifted freight from one railroad to the other and from the other railroad back to the other" as business decisions—part of normal operations rather than competitive concerns.
Ask Fintool AI AgentDedicated: Climbing Back from Retention Lows
The Dedicated Contract Services segment—J.B. Hunt's private fleet outsourcing business—has been recovering from elevated customer losses. Retention rates fell to 89% in Q3 2024 but have climbed back to 94% by year-end 2025, with management targeting a return to the historical 98% level.
"We sold just over 1,200 tractors of new business last year, which is on the lower side of our expectation," Hicks said. "However, given the backdrop of the market, I was proud of the team."
Notably, the company added 41 new customer names to its portfolio in 2025—a record for new relationships that Hicks sees as a foundation for future growth. Many multi-location accounts "all started with one," he noted.
Q4 2025 was the strongest sales quarter of the year, providing momentum into 2026. However, management guided for only "moderate income growth" this year as new business onboarded after June will be dilutive to current-year earnings. The real payoff comes in 2027.
What Drove the Losses?
Delco clarified that customer defections to competitors ranked "a distant fourth" among retention headwinds, behind:
- Customer bankruptcies
- Customer business downsizing
- Customers changing supply chain strategy
"We also have times when our customer's business is also just a little bit softer," Hicks added, noting that 20-truck fleets may have settled to 16 trucks. "What typically happens is, at some point, it rebounds and it recovers."
Q4 2025 Segment Performance
The company's cost-to-serve initiative, which targeted $100 million in structural cost reductions, has delivered meaningful margin improvement across segments:
| Metric | Q4 2024 | Q4 2025 | YoY Change |
|---|---|---|---|
| Revenue | $3.15B | $3.10B | -2% |
| Operating Income | $207M | $246.5M | +19% |
| Diluted EPS | $1.53 | $1.90 | +24% |
| EBITDA Margin | 13.1%* | 13.7%* | +60 bps |
*Values retrieved from S&P Global
AI and Business Transformation
When asked about AI disruption in freight brokerage—a topic that roiled transport stocks last week—Delco took a measured view.
"Do I think it's going to completely disintermediate various transportation providers? I'm probably not on that end of the spectrum," he said. "But I do know that our customers ask us to do a lot of work for them. Some of that work is very monotonous but repetitive, and we absolutely can deploy different technologies to help create efficiencies and automate that."
The company has partnered with Up.Labs on business transformation initiatives spanning:
- Asset utilization optimization
- Billing and quote-to-cash process improvements
Capital Allocation: Bought Back 6.5% of the Company
J.B. Hunt deployed $923 million in share repurchases during 2025, retiring 6.5% of outstanding shares at attractive prices during the freight downturn.
"As we're creating value, that value will accrete to fewer shareholders," Delco said. The company has also "pre-funded so much of our growth" in intermodal capacity, meaning capital needs going forward will be driven primarily by dedicated fleet expansion—which is tied to customer contracts with ROIC targets.
CapEx has moderated, reflecting both the freight environment and operational discipline. The dividend was increased 2.3% in January to $0.45 per quarter, payable February 20.
Ask Fintool AI AgentAnalyst Estimates: Street Expects Recovery
Consensus expects J.B. Hunt's earnings recovery to accelerate through 2026 as cost savings compound and demand improves:
| Metric | Q1 2026E | Q2 2026E | Q3 2026E | Q4 2026E |
|---|---|---|---|---|
| Revenue ($B) | $2.93* | $3.01* | $3.17* | $3.28* |
| EPS | $1.45* | $1.69* | $1.98* | $2.12* |
| EBITDA ($M) | $384* | $417* | $454* | $468* |
*Values retrieved from S&P Global
The consensus target price stands at $210, implying modest downside from current levels—though estimates have been trending higher following the Q4 beat.
What to Watch
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Mid-March demand read: Management will have clearer visibility once weather effects fade. Spot rates and tender rejections will signal whether tightness is structural.
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UP-NS merger response: Today's STB deadline for applicants to indicate resubmission plans could clarify the timeline for rail industry consolidation.
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Dedicated sales pipeline: Q2 onboarding will determine 2026 tractor count trajectory. The Q4 sales momentum needs to convert.
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2026 bid season: Still in "early innings," but J.B. Hunt's strategy focuses on backhaul growth, network optimization, and pricing to value. Summer updates typically provide bid season color.