Ryder System, Inc. (NYSE:R) Just Released a Report, and Analysts Are Raising Their Price Targets

As you probably know, Ryder Systems, Inc. (NYSE:R) recently released its second-quarter results. The results were generally positive – while revenue of $3.2 billion was in line with analysts’ expectations, Ryder Systems surprised with a statutory profit of $2.84 per share, slightly higher than expected. Analysts typically update their forecasts with each earnings report, and we can gauge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. We thought readers would find it interesting to see the latest (statutory) analyst forecasts following next year’s results.

See our latest analysis for Ryder System

Taking into account the latest results, the consensus forecast from Ryder System’s six analysts is for revenues of $13.0 billion in 2024. This reflects a satisfactory 6.3% improvement in revenues compared to the last 12 months. Statutory revenues per share are expected to come in at $11.36, which is roughly in line with the results from the last 12 months. However, prior to the latest results, the analysts had been predicting revenues of $13.2 billion and earnings per share (EPS) of $11.30 in 2024. So it’s pretty clear that while the analysts have updated their estimates, there hasn’t been any major change in expectations for the company following the latest results.

Analysts have reaffirmed their revenue and earnings forecasts, and surprisingly, the price target has increased by 5.6% to $150. It seems that they previously had some doubts about whether the company would meet their expectations. That’s not the only conclusion we can draw from this data, though, as some investors also like to consider the spread in estimates when evaluating analyst price targets. Currently, the most optimistic analyst values Ryder System at $165 per share, while the most pessimistic analyst values it at $137. A tight spread in estimates could suggest that the company’s future is relatively easy to estimate, or that analysts have a strong opinion on its prospects.

Now, looking at the bigger picture, one way we can understand these forecasts is to compare them to past performance and industry growth estimates. It’s clear from the latest estimates that Ryder System’s growth rate is set to accelerate significantly, with the projected 13% annual revenue growth through the end of 2024 being noticeably faster than the historical growth of 8.7% per year over the past five years. Compare this to other companies in the same industry, which are expected to grow revenue by 7.7% per year. It seems obvious that while the growth outlook is brighter than it has been in the recent past, analysts are also expecting Ryder System to grow faster than the broader industry.

Summary

The most obvious takeaway is that there have been no major changes to the business outlook recently, with analysts keeping their earnings forecasts steady, in line with previous estimates. Fortunately, there have been no major changes to revenue forecasts, and the business is still expected to grow faster than the broader industry. We note an increase in the price target, suggesting that analysts believe the intrinsic value of the business is likely to improve over time.

With that in mind, we still believe the longer-term trajectory of the business is much more important to investors. We have estimates – from multiple Ryder System analysts – going out to 2026, which you can see for free on our platform here.

However, the ever-present specter of investment risk still needs to be taken into account. We have identified 3 warning signs with the Ryder system (at least one that makes us a little uncomfortable), and understanding these principles should be part of your investing process.

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This Simply Wall St article is for general information purposes only. Our commentary is based solely on historical data and analyst forecasts, and is based on an objective methodology. Our articles are not intended to be financial advice. It is not a recommendation to buy or sell stocks and does not take into account your objectives or your financial situation. Our goal is to provide you with long-term, focused analysis based on fundamental data. Please note that our analysis may not reflect the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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