We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Here's Why Investors Should Retain Ryder (R) Stock for Now
Read MoreHide Full Article
Ryder System’s (R - Free Report) top line is boosted by a robust segmental performance by Dedicated Transportation Solutions (“DTS”) and Supply Chain Solutions (“SCS”). Proactive cost-cutting efforts and a shareholder-friendly approach bode well for the company. However, R is grappling with soft freight market conditions.
Factors Favoring R
Ryder’s top line is bolstered by its strong segmental performance. As a reflection of this, in the second quarter of 2024, the Fleet Management Solutions (“FMS”) unit saw a 2% revenue increase despite market challenges, driven by higher ChoiceLease revenues and maintenance cost savings.
Meanwhile, the SCS unit achieved a 14% revenue rise, driven by acquisitions and strong automotive growth. The DTS unit’s revenues grew by 48%, fueled by the Cardinal Logistics acquisition, completed earlier this year, and improved operational performance. This solid segmental performance underscores Ryder's resilience and strategic execution.
Ryder's cost-cutting initiatives in response to the weak freight market conditions are commendable. A key focus has been on maintenance cost savings, particularly within the FMS segment. Moreover, Ryder's strategic acquisitions, like Cardinal Logistics, have enabled the company to integrate synergies and optimize its multi-client network, further contributing to cost efficiencies. These measures are part of R's broader strategy to drive higher returns and outperformance relative to prior cycles.
Ryder’s focus on returning capital to shareholders through dividends and buybacks aligns with its strategy of maintaining a balanced and sustainable growth model. In the second quarter of 2024, the company increased its quarterly dividend by 14% to 75 cents per share, reflecting its commitment to providing consistent and growing returns to its shareholders. Ryder has returned $207 millionyear to datein cash to shareholders through share repurchases.
Shares of R have rallied 42.8% over the past year compared with its industry’s growth of 32.5% in the same period.
Image Source: Zacks Investment Research
Key Risks
The freight market downturn has adversely impactedthe company’s performance. Poor market conditions in rental and used vehicle sales have hurt the company’s performance. As evidence, Ryder's second-quarter 2024 earnings per share of $3 plunged 17% year over year.
Ryder’scurrent ratio (a measure of liquidity) stood at 0.74 at the end of the second quarter of 2024, raising liquidity concerns. A current ratio of less than 1 indicates that the company does not have enough cash to meet its short-term obligations.
Zacks Rank
R currently carries a Zacks Rank #3 (Hold).
Stocks to Consider
Some better-ranked stocks for investors’ consideration in the Zacks Transportation sector include C.H. Robinson Worldwide (CHRW - Free Report) and Westinghouse Air Brake Technologies (WAB - Free Report) .
The company has an impressive earnings surprise history. Its earnings outpaced the Zacks Consensus Estimate in three of the trailing four quarters and missed once, delivering an average surprise of 7.3%. Shares of CHRW have risen 8.7% in the past year.
WAB holds a Zacks Rank #2 (Buy) at present and has an expected earnings growth rate of 26% for the current year.
The company has an encouraging track record with respect to the earnings surprise, having surpassed the Zacks Consensus Estimate in each of the trailing four quarters. The average beat is 11.8%. Shares of WAB have climbed 45.4% in the past year.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Here's Why Investors Should Retain Ryder (R) Stock for Now
Ryder System’s (R - Free Report) top line is boosted by a robust segmental performance by Dedicated Transportation Solutions (“DTS”) and Supply Chain Solutions (“SCS”). Proactive cost-cutting efforts and a shareholder-friendly approach bode well for the company. However, R is grappling with soft freight market conditions.
Factors Favoring R
Ryder’s top line is bolstered by its strong segmental performance. As a reflection of this, in the second quarter of 2024, the Fleet Management Solutions (“FMS”) unit saw a 2% revenue increase despite market challenges, driven by higher ChoiceLease revenues and maintenance cost savings.
Meanwhile, the SCS unit achieved a 14% revenue rise, driven by acquisitions and strong automotive growth. The DTS unit’s revenues grew by 48%, fueled by the Cardinal Logistics acquisition, completed earlier this year, and improved operational performance. This solid segmental performance underscores Ryder's resilience and strategic execution.
Ryder's cost-cutting initiatives in response to the weak freight market conditions are commendable. A key focus has been on maintenance cost savings, particularly within the FMS segment. Moreover, Ryder's strategic acquisitions, like Cardinal Logistics, have enabled the company to integrate synergies and optimize its multi-client network, further contributing to cost efficiencies. These measures are part of R's broader strategy to drive higher returns and outperformance relative to prior cycles.
Ryder’s focus on returning capital to shareholders through dividends and buybacks aligns with its strategy of maintaining a balanced and sustainable growth model. In the second quarter of 2024, the company increased its quarterly dividend by 14% to 75 cents per share, reflecting its commitment to providing consistent and growing returns to its shareholders. Ryder has returned $207 millionyear to datein cash to shareholders through share repurchases.
Shares of R have rallied 42.8% over the past year compared with its industry’s growth of 32.5% in the same period.
Image Source: Zacks Investment Research
Key Risks
The freight market downturn has adversely impactedthe company’s performance. Poor market conditions in rental and used vehicle sales have hurt the company’s performance. As evidence, Ryder's second-quarter 2024 earnings per share of $3 plunged 17% year over year.
Ryder’scurrent ratio (a measure of liquidity) stood at 0.74 at the end of the second quarter of 2024, raising liquidity concerns. A current ratio of less than 1 indicates that the company does not have enough cash to meet its short-term obligations.
Zacks Rank
R currently carries a Zacks Rank #3 (Hold).
Stocks to Consider
Some better-ranked stocks for investors’ consideration in the Zacks Transportation sector include C.H. Robinson Worldwide (CHRW - Free Report) and Westinghouse Air Brake Technologies (WAB - Free Report) .
C.H. Robinson Worldwide currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here. CHRW has an expected earnings growth rate of 25.2% for the current year.
The company has an impressive earnings surprise history. Its earnings outpaced the Zacks Consensus Estimate in three of the trailing four quarters and missed once, delivering an average surprise of 7.3%. Shares of CHRW have risen 8.7% in the past year.
WAB holds a Zacks Rank #2 (Buy) at present and has an expected earnings growth rate of 26% for the current year.
The company has an encouraging track record with respect to the earnings surprise, having surpassed the Zacks Consensus Estimate in each of the trailing four quarters. The average beat is 11.8%. Shares of WAB have climbed 45.4% in the past year.