Stephens has revised its price target for Ryder System, Inc. (R, Financial), reducing it from $168 to $150, while maintaining an Equal Weight rating for the stock. This adjustment follows Ryder's recent guidance for the year, which was generally in line with market expectations. However, the company's outlook for the second quarter revealed a 5.5% shortfall compared to consensus estimates, signaling potential issues ahead.
Analysts at Stephens have expressed concerns regarding the performance of Ryder's rental business, highlighting that the situation appears more challenging than initially anticipated. The truckload market remains a significant hurdle, and ongoing pressure within Ryder's Fleet Management Solutions (FMS) segment further complicates the outlook.
Given these factors, Stephens has chosen to remain cautious with its assessment of Ryder, citing persistent challenges that may impact the company's future performance.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 5 analysts, the average target price for Ryder System Inc (R, Financial) is $160.79 with a high estimate of $175.00 and a low estimate of $143.94. The average target implies an upside of 15.57% from the current price of $139.13. More detailed estimate data can be found on the Ryder System Inc (R) Forecast page.
Based on the consensus recommendation from 7 brokerage firms, Ryder System Inc's (R, Financial) average brokerage recommendation is currently 2.6, indicating "Hold" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for Ryder System Inc (R, Financial) in one year is $124.51, suggesting a downside of 10.51% from the current price of $139.13. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the Ryder System Inc (R) Summary page.
R Key Business Developments
Release Date: April 23, 2025
- Operating Revenue: $2.6 billion in Q1, up 2% from the prior year.
- Comparable EPS: $2.46 in Q1, up from $2.14 in the prior year.
- Return on Equity (ROE): 17% for the trailing 12-month period.
- Free Cash Flow: Increased to $259 million from $13 million in the prior year.
- Fleet Management Solutions Operating Revenue: Increased 1%, with ChoiceLease revenue up 3%.
- Rental Utilization: 66% for the power fleet, in line with the prior year.
- Used Vehicle Sales: Tractor proceeds declined 16%, truck proceeds declined 17% year-over-year.
- Supply Chain Operating Revenue: Increased 3%, with earnings up 35% from the prior year.
- Dedicated Operating Revenue: Increased 8%, with EBT up 50% year-over-year.
- Lease Capital Spending: $413 million in Q1, below prior year.
- Rental Capital Spending: $78 million, in line with prior year.
- Full Year 2025 Comparable EPS Forecast: $12.85 to $13.60.
- Full Year 2025 ROE Forecast: 16.5% to 17.5%.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Ryder System Inc (R, Financial) reported double-digit earnings growth in the first quarter, in line with their forecast.
- The company has successfully shifted its revenue mix towards asset-light businesses, with 60% of 2025 revenue expected from Supply Chain and Dedicated Transportation Solutions.
- Ryder System Inc (R) increased its 2025 forecast for free cash flow to a range of $375 million to $475 million, primarily due to lower expected capital spending.
- The company returned $202 million to shareholders through share repurchases and dividends during the quarter.
- Ryder System Inc (R) expects to realize significant benefits from multiyear strategic initiatives, contributing to an expected annual pretax earnings benefit of approximately $150 million.
Negative Points
- Rental demand and used vehicle sales remain weak, impacting earnings in the Fleet Management Solutions segment.
- Year-over-year used tractor proceeds declined 16% and used truck proceeds declined 17%, reflecting weaker market conditions.
- The rental fleet utilization rate was 66%, below the company's long-term target of low teens over the cycle.
- The company faces near-term contractual sales headwinds due to economic uncertainty, causing some customers to delay decisions or downsize fleets.
- Ryder System Inc (R) revised its 2025 ROE forecast range to 16.5% to 17.5%, down from the previous range of 17% to 18%, reflecting a more muted macroeconomic environment.
