R - Ryder System: Solid Q1 Shows Pivot To Leasing Is Working

2024-04-30 08:00:00 ET

Summary

• Ryder System's shares have gained over 50% in the past year, driven by a strong trucking cycle and excellent financial results.
• The company's business transformation has been more powerful than expected, with run-rate earnings projected to be at least $11 per share.
• R stock's shift towards the more stable leasing market has helped it manage through the downturn, and its focus on growing its integrated solutions with customers is expected to drive steady cash flows and better economics.

Shares of Ryder System ( R ) have been a tremendous performer over the past year, gaining over 50% as the trucking cycle has proven more durable than feared. Last week, the company reported excellent results with strong guidance, causing shares to rally back to a 52-week-high. I last covered Ryder in October , rating shares a buy, and since then, shares are up over 33% vs. the 22% gain in the S&P 500. While I thought earnings may have peaked, Ryder's business transformation meant run-rate earnings would be at least $9, leaving shares under-valued. In hindsight, it appears the business transformation has been even more powerful than I expected. I continue to be bullish....

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