Trucking companies have recorded outstanding profits in the last year, thanks to supply challenges and robust demand for goods globally.
American transportation and logistics company Ryder System, Inc. (NYSE: R) is one such corporation, which turned profitable in 2021, with strong revenues and profitability. Growth momentum continued in the first quarter, reflecting strong performance in Fleet Management Solutions (FMS) and Dedicated Transportation Solutions (DTS). Particularly, used vehicle sales and rental market provided potential returns due to truck capacity constraints in the market.
Management commented, “Looking ahead, we’ve increased our 2022 ROE and comparable EPS forecasts reflecting continued momentum in FMS. Our forecast continues to anticipate that the very strong used vehicle sales and rental market environment will moderate in the second half of the year, with slower freight growth partially offset by ongoing vehicle production constraints.”
Also, the company’s multi-year lease pricing initiative is anticipated to continue to aid profitability.
Though the recent market sell-off wiped off the stock gains to some extent, it is still hovering towards its 52-week high price.
Tempted by Ryder’s long-term prospects, the hedge fund HG Vora Capital Management LLC recently put forward a proposal to buy out the trucking company in a $4.4 billion deal.
However, Ryder said that it will “carefully review and evaluate the indication of interest”, keeping the best interests of shareholders into consideration.
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