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Here's Why Ryder's Shares Have Gained 53.7% in 6 Months
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Ryder System’s (R - Free Report) shares have held up well in the past six months, gaining 53.7% compared with the industry’s 32.3% increase.
Reasons for the Surge
Ryder’s cost-cutting measures to combat the coronavirus-related adversities are encouraging. Temporary furloughs of employees, reduced discretionary spending and low medical expenses led to cost savings of $35 million in the second quarter. It is expected to generate savings of $12 million per quarter by trimming workforce. Additionally, the company expects annual savings of $30 million in the current year from its multi-year maintenance initiative.
With the company lowering investments in lease and rental fleets due to reduced demand as a result of coronavirus, capital expenditures are declining. This is supporting the bottom line as reflected by the narrower-than-expected loss incurred in the second quarter of 2020. The company lowered its gross capital expenditure forecast to $1-$1.3 billion for 2020 compared with $2.1 billion predicted previously.
Moreover, the reduction in capital expenses is positively impacting its free cash flow. With capital expenditures declining 72.7% year over year in the first half of 2020, free cash flow came in at $612 million in the period against a negative free cash flow of $909 million in the year-ago period.
Favorable Estimate Revisions
The Zacks Consensus Estimate for September-quarter bottom line has narrowed to a loss of 43 cents from the loss of 46 cents in the past 60 days. Similarly, the Zacks Consensus Estimate for current-year bottom line has narrowed to a loss of $2.84 per share from a loss of $2.89 per share in the same time frame.
Long-term expected earnings per share (three to five years) growth rate for J.B. Hunt, Werner and Knight-Swift is pegged at 15%, 8.5% and 15%, respectively.
Zacks’ 2020 Election Stock Report
In addition to the companies you learned about above, we invite you to learn more about profiting from the upcoming presidential election. Trillions of dollars will shift into new market sectors after the votes are tallied, and investors could see significant gains. This report reveals specific stocks that could soar: 6 if Trump wins, 6 if Biden wins. Check out the 2020 Election Stock Report >>
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Here's Why Ryder's Shares Have Gained 53.7% in 6 Months
Ryder System’s (R - Free Report) shares have held up well in the past six months, gaining 53.7% compared with the industry’s 32.3% increase.
Reasons for the Surge
Ryder’s cost-cutting measures to combat the coronavirus-related adversities are encouraging. Temporary furloughs of employees, reduced discretionary spending and low medical expenses led to cost savings of $35 million in the second quarter. It is expected to generate savings of $12 million per quarter by trimming workforce. Additionally, the company expects annual savings of $30 million in the current year from its multi-year maintenance initiative.
With the company lowering investments in lease and rental fleets due to reduced demand as a result of coronavirus, capital expenditures are declining. This is supporting the bottom line as reflected by the narrower-than-expected loss incurred in the second quarter of 2020. The company lowered its gross capital expenditure forecast to $1-$1.3 billion for 2020 compared with $2.1 billion predicted previously.
Moreover, the reduction in capital expenses is positively impacting its free cash flow. With capital expenditures declining 72.7% year over year in the first half of 2020, free cash flow came in at $612 million in the period against a negative free cash flow of $909 million in the year-ago period.
Favorable Estimate Revisions
The Zacks Consensus Estimate for September-quarter bottom line has narrowed to a loss of 43 cents from the loss of 46 cents in the past 60 days. Similarly, the Zacks Consensus Estimate for current-year bottom line has narrowed to a loss of $2.84 per share from a loss of $2.89 per share in the same time frame.
Zacks Rank & Other Key Picks
Ryder carries a Zacks Rank #2 (Buy).
Investors interested in the broader Transportation sector can consider stocks like J.B. Hunt Transport Services, Inc. (JBHT - Free Report) , Werner Enterprises, Inc. (WERN - Free Report) and Knight-Swift Transportation Holdings Inc (KNX - Free Report) . While J.B. Hunt and Werner sport a Zacks Rank #1 (Strong Buy), Knight-Swift carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Long-term expected earnings per share (three to five years) growth rate for J.B. Hunt, Werner and Knight-Swift is pegged at 15%, 8.5% and 15%, respectively.
Zacks’ 2020 Election Stock Report
In addition to the companies you learned about above, we invite you to learn more about profiting from the upcoming presidential election. Trillions of dollars will shift into new market sectors after the votes are tallied, and investors could see significant gains. This report reveals specific stocks that could soar: 6 if Trump wins, 6 if Biden wins. Check out the 2020 Election Stock Report >>