Hub Group's Revenue Growth Slows, but Acquisitions Bolster Business; Susquehanna Raises Price Target to $47

Susquehanna has raised Hub Group's (HUBG) price target to $47, up from $46, while maintaining a Positive rating. The adjustment reflects the firm's view that a narrower full-year forecast is both sensible and attainable. Hub Group is bolstering its business through acquisitions and cost-saving measures, offsetting weak demand in intermodal and brokerage services. The company's strategic acquisitions and diversified service offerings position it well within the transportation industry.

Hub Group, Inc. (HUBG) reported its second-quarter (Q2) 2025 earnings, showcasing resilience in the face of tariff-driven challenges. The company reported net income of $25 million, or 42 cents per diluted share, down from $29 million, or 47 cents, in the same period last year. Total revenue decreased 8.2% to $905.6 million from $986.5 million [1].

CEO Phil Yeager attributed the decline to tariff-driven adjustments to shipping patterns, noting that while transactional services were less impacted than anticipated, slower import volumes near the end of the quarter led to a decline in demand. However, contractual services maintained resiliency, contributing to a strong balance sheet and steady free cash flow [1].

Yeager highlighted the acquisition of Marten Transport's refrigerated intermodal business, which enhances Hub Group's scale and capacity in one of the highest growth segments of its intermodal network. The company also announced a robust pipeline of additional acquisitions and plans to continue deploying capital towards long-term growth opportunities [1].

To offset the impact of weak demand, Hub Group implemented a cost reduction program, raising its target from $40 million to $50 million. The company has completed the vast majority of its initial $40 million goal and identified additional opportunities for savings and efficiency gains [1].

Looking ahead, Hub Group expects near-term demand trends off the West Coast to be strong, with indications of an early West Coast peak season. This, coupled with several sizable startups in its logistics services, should lead to improving revenue through the remainder of the year [1].

Susquehanna has raised Hub Group's price target to $47, up from $46, while maintaining a Positive rating. The adjustment reflects the firm's view that a narrower full-year forecast is both sensible and attainable, given the company's strategic acquisitions and cost-saving measures [2].

References:
[1] https://www.ttnews.com/articles/hub-earnings-q2-2025
[2] https://seekingalpha.com/news/4476825-hub-group-raises-cost-savings-target-to-50m-while-signaling-early-west-coast-peak-and