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Ryder System (R) Now a Buy: Is It Part of Your Portfolio? - Analyst Blog

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On Apr 11, Zacks Investment Research upgraded Ryder System, Inc.R , a major provider of integrated logistics and transportation solutions, by a notch to a Zacks Rank #2 (Buy).

Ryder System continues to benefit from organic growth across its business line. Improving demand in North America with tighter transportation markets, in particular for trucks, has enabled the company to realize higher pricing, propelling earnings growth.

Moreover, the company expects demand in Full Service Lease and solid performance in Commercial rentals along with on-demand maintenance initiatives to improve 2015 earnings. Further, the Supply Chain business is expected to grow on the back of strong new sales and rise in customer volumes.

In addition, the company's efforts toward deploying a fuel-efficient fleet will help strengthen its foothold in the rapidly growing market of environmentally friendly vehicles. Further, we believe Ryder's strategic acquisitions coupled with a favorable lease rate environment, should deliver strong results for the company, going forward.

In Dec 2014, Ryder teamed up with Language Select - a telephone interpretation service provider - to offer more than 200 language options to its pre-owned vehicle customers. Notably, Ryder is the first commercial fleet management company to launch such a service.

Meanwhile, for the last 34 years, the company has been consistently paying dividends to its investors. We believe frequent share buybacks coupled with regular dividend payments will continue to boost shareholders' wealth.

Ryder delivered mixed numbers in the fourth quarter of 2014 reporting higher-than-expected earnings but lower-than-estimated revenues. Revenues were, however, up 2% from the year-ago quarter buoyed by higher commercial rental revenues and new business wins along with volume expansion in the Supply Chain Solutions division. Moreover, earnings also escalated 18.5% from the year-ago figure.

Buoyed by these tailwinds, for fiscal 2015, Ryder raised its earnings per share estimate to $6.25-$6.40 per share from the previous guided $5.58 per share. Total revenue for 2015 is expected to be $6.84 billion, up 3% while operating revenues for the same period will likely rise by 7% to $5.64 billion.

Meanwhile, Ryder's trailing four-quarter average earnings surprise stands at a positive of around 2.50%.

Other Stocks to Consider

Investors interested in the same sector may also consider stocks like Aircastle LTD AYR , The Greenbrier Companies, Inc. GBX and Teekay Tankers Ltd. TNK . All the three stocks currently sport a Zacks Rank #1 (Strong Buy).

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RYDER SYS (R): Free Stock Analysis Report

AIRCASTLE LTD (AYR): Free Stock Analysis Report

GREENBRIER COS (GBX): Free Stock Analysis Report

TEEKAY TANKERS (TNK): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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