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Ryder (R) Up 14.1% Since Last Earnings Report: Can It Continue?
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A month has gone by since the last earnings report for Ryder (R - Free Report) . Shares have added about 14.1% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Ryder due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Earnings Beat at Ryder in Q3
Quarterly earnings (excluding 11 cents from non-recurring items) of $3.58 per share surpassed the Zacks Consensus Estimate of $3.38. However, the bottom line plunged 19.6% year over year, mainly reflecting weaker market conditions in used vehicle sales and rental.
Total revenues of $2,924 million lagged the Zacks Consensus Estimate of $3020.1 million. The top line decreased 3.7% year over year. Results were hurt by lower commercial rental revenues in Fleet Management Solutions.
Segmental Results
Fleet Management Solutions: Total revenues of $1,487 million dipped 6% year over year. We estimated a marginal rise from third-quarter 2022 actuals. Operating revenues summed $1,266 million, down 3% year over year. Segmental revenues were hurt by the negative impact of operating revenues from the UK exit.
Supply-Chain Solutions: Total revenues of $1,194 million inched down 1% year over year. We suggested a 3.6% rise from third-quarter 2022 actuals. Operating revenues rose 9% year over year to $909 million on the back of strong revenue growth in all industry verticals primarily due to new business and increased pricing.
Dedicated Transportation Solutions: Total revenues reached $448 million, down 1% from the year-ago quarter. We projected a 1.7% gain from third-quarter 2022 actuals. Operating revenues climbed 3% to $325 million. The uptick was driven by inflationary cost recovery.
Liquidity
Ryder exited the third quarter with cash and cash equivalents of $159 million compared with $267 million at the end of December 2022. R’s total debt (including the current portion) was $6,621 million at third-quarter end compared with $6,352 million at the end of December 2022.
Q4 & 2023 Outlook
For fourth-quarter 2023, Ryder expects adjusted earnings per share in the range of $2.60-$2.85.
For 2023, management anticipates total revenues to decrease 2%. Operating revenues are forecast to increase 2%. Adjusted EPS for the year is now estimated to be between $12.60 and $12.85 (prior view: $12.20 and $12.70). Management now envisions free cash flow to be $100 million for 2023. Net cash from operating activities is still projected to be $2.5 billion. Adjusted ROE (return on equity) is still suggested in the 18-19% band (prior view: 17-19% range). Capital expenditure is still estimated to be $3.2 billion.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates revision.
The consensus estimate has shifted -12.08% due to these changes.
VGM Scores
Currently, Ryder has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with an F. However, the stock was allocated a grade of A on the value side, putting it in the top quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Ryder has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
Ryder is part of the Zacks Transportation - Equipment and Leasing industry. Over the past month, Gatx (GATX - Free Report) , a stock from the same industry, has gained 5.9%. The company reported its results for the quarter ended September 2023 more than a month ago.
Gatx reported revenues of $360.1 million in the last reported quarter, representing a year-over-year change of +12.2%. EPS of $1.44 for the same period compares with $1.12 a year ago.
For the current quarter, Gatx is expected to post earnings of $1.56 per share, indicating a change of +1.3% from the year-ago quarter. The Zacks Consensus Estimate has changed +7.6% over the last 30 days.
The overall direction and magnitude of estimate revisions translate into a Zacks Rank #3 (Hold) for Gatx. Also, the stock has a VGM Score of D.
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Ryder (R) Up 14.1% Since Last Earnings Report: Can It Continue?
A month has gone by since the last earnings report for Ryder (R - Free Report) . Shares have added about 14.1% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Ryder due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Earnings Beat at Ryder in Q3
Quarterly earnings (excluding 11 cents from non-recurring items) of $3.58 per share surpassed the Zacks Consensus Estimate of $3.38. However, the bottom line plunged 19.6% year over year, mainly reflecting weaker market conditions in used vehicle sales and rental.
Total revenues of $2,924 million lagged the Zacks Consensus Estimate of $3020.1 million. The top line decreased 3.7% year over year. Results were hurt by lower commercial rental revenues in Fleet Management Solutions.
Segmental Results
Fleet Management Solutions: Total revenues of $1,487 million dipped 6% year over year. We estimated a marginal rise from third-quarter 2022 actuals. Operating revenues summed $1,266 million, down 3% year over year. Segmental revenues were hurt by the negative impact of operating revenues from the UK exit.
Supply-Chain Solutions: Total revenues of $1,194 million inched down 1% year over year. We suggested a 3.6% rise from third-quarter 2022 actuals. Operating revenues rose 9% year over year to $909 million on the back of strong revenue growth in all industry verticals primarily due to new business and increased pricing.
Dedicated Transportation Solutions: Total revenues reached $448 million, down 1% from the year-ago quarter. We projected a 1.7% gain from third-quarter 2022 actuals. Operating revenues climbed 3% to $325 million. The uptick was driven by inflationary cost recovery.
Liquidity
Ryder exited the third quarter with cash and cash equivalents of $159 million compared with $267 million at the end of December 2022. R’s total debt (including the current portion) was $6,621 million at third-quarter end compared with $6,352 million at the end of December 2022.
Q4 & 2023 Outlook
For fourth-quarter 2023, Ryder expects adjusted earnings per share in the range of $2.60-$2.85.
For 2023, management anticipates total revenues to decrease 2%. Operating revenues are forecast to increase 2%. Adjusted EPS for the year is now estimated to be between $12.60 and $12.85 (prior view: $12.20 and $12.70). Management now envisions free cash flow to be $100 million for 2023. Net cash from operating activities is still projected to be $2.5 billion. Adjusted ROE (return on equity) is still suggested in the 18-19% band (prior view: 17-19% range). Capital expenditure is still estimated to be $3.2 billion.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates revision.
The consensus estimate has shifted -12.08% due to these changes.
VGM Scores
Currently, Ryder has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with an F. However, the stock was allocated a grade of A on the value side, putting it in the top quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Ryder has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
Ryder is part of the Zacks Transportation - Equipment and Leasing industry. Over the past month, Gatx (GATX - Free Report) , a stock from the same industry, has gained 5.9%. The company reported its results for the quarter ended September 2023 more than a month ago.
Gatx reported revenues of $360.1 million in the last reported quarter, representing a year-over-year change of +12.2%. EPS of $1.44 for the same period compares with $1.12 a year ago.
For the current quarter, Gatx is expected to post earnings of $1.56 per share, indicating a change of +1.3% from the year-ago quarter. The Zacks Consensus Estimate has changed +7.6% over the last 30 days.
The overall direction and magnitude of estimate revisions translate into a Zacks Rank #3 (Hold) for Gatx. Also, the stock has a VGM Score of D.