One of the world's largest providers of integrated logistics and
Ryder System Inc.
) will be providing onsite maintenance for a fleet of 500 trucks
and 675 trailers and a full service lease for 205 tractors to Multi
Group Logistics, Inc, an Illinois based truckload service provider.
Financial terms of the deal remained undisclosed.
Ryder will provide its advanced technology for fleet maintenance
at Multi Group Logistics. The company's Full Service Lease contract
involves the turnkey lease project, comprising vehicle
configuration, financing, acquisition, maintenance and
Currently, Ryder operates more than 225 On-Site Fleet
Maintenance facilities in the U.S., Puerto Rico and Canada, out of
the total service network of 800 facilities. Unlike extended
contracts, the company expects the new full-term lease contracts to
help it gain market share.
We believe Ryder continues to benefit from strong commercial
rental and used vehicle sales backed by a favorable lease rate
environment. In addition, strategic acquisitions and increased
investments in vehicles provide long-term growth potential for the
However, we remain concerned about the challenging economic
environment surrounding the company's operations despite its strong
performance. Further, heavy capital expenditures, a distressed cash
position, lower demand on tighter truckload market and competition
from the likes of
AmeraMex International, Inc.
) are also expected to create significant headwinds for the
We, currently, have a long-term Neutral rating on Ryder System.
For the short term (1-3 months), the stock retains a Zacks #3 Rank
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RYDER SYS (R): Free Stock Analysis Report
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