Results: Ryder System, Inc. Exceeded Expectations And The Consensus Has Updated Its Estimates

Investors in Ryder System, Inc. (NYSE:R) had a good week, as its shares rose 7.5% to close at US$183 following the release of its quarterly results. The result was positive overall - although revenues of US$3.2b were in line with what the analysts predicted, Ryder System surprised by delivering a statutory profit of US$3.13 per share, modestly greater than expected. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

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After the latest results, the consensus from Ryder System's six analysts is for revenues of US$12.4b in 2025, which would reflect a discernible 2.4% decline in revenue compared to the last year of performance. Per-share earnings are expected to rise 3.1% to US$12.73. Before this earnings report, the analysts had been forecasting revenues of US$12.8b and earnings per share (EPS) of US$11.90 in 2025. If anything, the analysts look to have become slightly more optimistic overall; while they decreased their revenue forecasts, EPS predictions increased and ultimately earnings are more important.

Check out our latest analysis for Ryder System

The average price target increased 6.6% to US$190, with the analysts signalling that the improved earnings outlook is more important to the company's valuation than its revenue. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. Currently, the most bullish analyst values Ryder System at US$215 per share, while the most bearish prices it at US$175. With such a narrow range of valuations, the analysts apparently share similar views on what they think the business is worth.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. These estimates imply that revenue is expected to slow, with a forecast annualised decline of 4.7% by the end of 2025. This indicates a significant reduction from annual growth of 9.0% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 7.3% annually for the foreseeable future. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Ryder System is expected to lag the wider industry.

The Bottom Line

The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards Ryder System following these results. On the negative side, they also downgraded their revenue estimates, and forecasts imply they will perform worse than the wider industry. Still, earnings per share are more important to value creation for shareholders. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have forecasts for Ryder System going out to 2027, and you can see them free on our platform here.

Don't forget that there may still be risks. For instance, we've identified 2 warning signs for Ryder System (1 can't be ignored) you should be aware of.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.