DCF Studio

    JBHT · NMS · Industrials

    J.B. Hunt Transport Services, Inc.

    Also onShortfallConsensus DriftCrosscheck

    Implied value per share

    USD 27.88

    Market price

    USD 234.25

    Implied upside

    -88.1%

    5-year forecast · Perpetuity growth terminal value · Mid-year discounting · Base case

    AdjustedCapital expenditure runs at 9.5% of revenue against depreciation of 5.6%. A perpetuity has to be a steady state, so the terminal year uses maintenance capex at depreciation and then charges the reinvestment terminal growth requires (g/ROIC of NOPAT). The bridge is shown under Terminal Value.

    Value Per Share

    Perpetuity growth
    USD 27.88-88.1%
    Exit multiple
    USD 102.17-56.4%
    Market price
    USD 234.25

    Same forecast, different terminal treatment. Percentages vs price.

    Forecast Cashflows

    Reporting currency (USD). Outflows negative.

    0m153m305mFY26FY27FY28FY29FY30
    Nominal FCFFDiscounted to todayUSD
    LineFY26FY27FY28FY29FY30CAGR
    RevenueUSD 11.2bnUSD 10.4bnUSD 9.7bnUSD 9.1bnUSD 8.4bn-6.8%
    EBITUSD 861.7mUSD 803.3mUSD 748.8mUSD 698.0mUSD 650.6m-6.8%
    NOPATUSD 680.7mUSD 634.6mUSD 591.5mUSD 551.4mUSD 514.0m-6.8%
    Add depreciation & amortisationUSD 625.2mUSD 582.7mUSD 543.2mUSD 506.4mUSD 472.0m-6.8%
    Less capital expenditureUSD -1.1bnUSD -994.8mUSD -927.4mUSD -864.4mUSD -805.8m-6.8%
    Less increase in working capitalUSD 66.4mUSD 61.9mUSD 57.7mUSD 53.8mUSD 50.1m+6.8%
    Free cashflow to firmUSD 305.1mUSD 284.4mUSD 265.1mUSD 247.1mUSD 230.3m-6.8%
    Discount factor0.94880.85400.76880.69200.6229-
    Present valueUSD 289.4mUSD 242.9mUSD 203.8mUSD 171.0mUSD 143.5m-16.1%
    Present Value Of The ForecastUSD 1.1bn

    Discount Rate

    Source shown per component. All overridable above.

    Risk-free rate5.00%US 10-year Treasury (^TNX)
    Equity risk premium5.50%Market assumption
    Beta1.194Reported 1.289, pulled toward 1.0 (Blume)
    Cost of equity11.56%Risk-free + beta x equity risk premium
    Cost of debt5.11%Interest expense / average total debt
    Market capitalisationUSD 22.0bn93.7% of capital
    Total debtUSD 1.5bn6.3% of capital, book value as a proxy
    Tax rate21.0%Effective, capped at statutory
    WACC11.09%E/V x Re + D/V x Rd x (1 - t)

    Terminal Value

    Perpetuity growth is intrinsic. The exit multiple defaults to the company's current EV/EBITDA, so it answers a different question - what the shares are worth if today's rating holds and EBITDA grows as forecast.

    Perpetuity growth at 2.50%

    Value per shareUSD 27.88

    75% of EV

    Forecast FCFF, final year
    USD 230.3m
    Capex at depreciation, working capital in reinvestment
    USD 514.0m
    Less reinvestment at g/ROIC (18.3% of NOPAT)
    USD -93.8m
    Capitalised
    USD 420.2m
    ROIC (reported)
    13.7%
    Terminal value, undiscounted
    USD 5.0bn
    Terminal value, discounted
    USD 3.1bn
    Enterprise value
    USD 4.2bn
    Less net debt
    USD 1.4bn
    Equity value
    USD 2.7bn

    Exit at 14.8x EBITDA

    Value per shareUSD 102.17

    91% of EV

    Terminal value, undiscounted
    USD 16.7bn
    Terminal value, discounted
    USD 10.4bn
    Enterprise value
    USD 11.4bn
    Less net debt
    USD 1.4bn
    Equity value
    USD 10.0bn

    Spread between methods: 114%.

    Sensitivity

    Value per share (USD) by discount rate and long-run growth.

    Long-run growth
    Discount rate1.50%2.00%2.50%3.00%3.50%
    9.09%38.6940.0341.5543.3145.35
    10.09%32.0432.8733.8034.8436.03
    11.09%26.8027.3127.8828.4929.18
    12.09%22.5722.8823.2123.5623.94
    13.09%19.1019.2619.4419.6219.81

    Outlined: this model. Green text: above today's price of 234.25. Shading: distance from this model's own value.

    Priced In

    What each input would have to be to justify the current price, one at a time.

    InputModelImpliedGap
    Revenue growth, every year-6.8%40.9%+47.7pp
    EBIT margin7.7%36.1%+28.4pp
    Discount rate11.1%4.1%-7.0pp
    Download as Excel

    Live formulas, not pasted numbers - edit a driver and the workbook reprices.

    Yahoo Finance and RBA data. General information, not advice. Methodology.