Stifel Downgrades Ryder System, Expects Benefit From Outsourcing Tailwinds
Analyst David Ross at Stifel Nicolaus on Thursday, April 17, 2014, downgraded Ryder System, Inc. (NASDAQ: R) from Buy to Neutral and removed the $84.00 price target. Shares of the company are down $0.39 or 0.48 percent to $80.21 per share. The firm commented, “Although we continue to believe Ryder is a leader in the fleet management and supply chain arena and should benefit from outsourcing tailwinds over the next few years, the stock is approaching our fair value estimate, so we would wait for a pullback to begin accumulating shares again, all else equal. Weather for 1Q14 has been priced in to transport stocks already, in our view, but we are also taking this opportunity to officially reduce our 1Q14 EPS estimate as a result of the network disruptions. Ryder should see less of a negative impact from weather than most of our coverage, but weather was still a headwind. We would look to be buyers of R again closer to $70, all else equal.” The firm continued to say Ryder's shares have historically traded between 9x to 15x earnings, so at 13.4x its 2015 earnings per share estimates of $6.00, the firm believes the stock is fairly valued. The firm also cited the used truck market performing well, which is very important, according to Stifel.
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