RYDER SYSTEM INC (R): what the price assumes
In the published model solve dated 2026-Q2, anchored at $254.29, RYDER SYSTEM INC (R) is priced for +9.9% growth. boothcheck publishes no house fair value, target price, or buy/sell rating; individual model outputs and user-controlled scenarios are analytical inputs, not Boothcheck targets. Narrative composed 2026-06-28.
Generated: 2026-08-01 · Exported: 2026-08-03 · Source: https://boothcheck.com/report/R
Headline
| Field | Value |
|---|---|
| Ticker | R |
| Company | RYDER SYSTEM INC |
| Current price | $254.30/sh |
| Composition | Fleet Management Solutions (FMS) 46% / Supply Chain Solutions (SCS) 43% / Dedicated Transportation Solutions (DTS) 19% / Eliminations -8% |
What The Price Assumes (Inversion)
The assumption today's price embeds, recovered by inverting the valuation.
| Field | Value |
|---|---|
| Inversion basis | segment |
| Implied growth | 9.9% |
Solve inputs: computed at a 7% cost of capital with 5% terminal growth over a 5-year stage; each 1pp of cost of capital moves the implied operating-profit growth ~13pp (computed at the 7% minimum rate; the CAPM rate 6.7% sits below it).
Reconcile: at the x-ray's 9.3% required return this reads ~7.1 years; the models below use their own rates.
How unusual the bet is: within-range (limited comparison data)
| Reference | Value |
|---|---|
| cohort percentile (of 214 peers) | 94 |
| implied end-window share | 0% |
Valuation X-Ray
The price is justified by relative-multiple; asset-based/earnings-power land below the price.
How the valuation models price the stock relative to the market price. Price/FV above 1.0 means the market pays more than that lens defends (expensive); at or below 1.0 the lens can defend the price.
| Family | Median price/FV | Models | Reads |
|---|---|---|---|
| Asset | 1.58x | 4 | expensive |
| Earnings | 1.96x | 3 | expensive |
| Relative | 0.71x | 5 | justifies |
| Growth | 1.42x | 3 | expensive |
Families that justify the price: Relative Families that call it expensive: Asset, Earnings
The models below discount at their own flat-beta convention rates (cost of equity 9.3%, WACC 7.8%); the inversion above states its own rate.
Per-Model Detail (n=15)
| Model | Family | FV | Price/FV | Applicable | Methodology |
|---|---|---|---|---|---|
| DCF Perpetual Growth | Growth | $108.92 | 2.33x | yes | FCF base $0.5B, growth -0% (input: historical growth), terminal g 0.5%, WACC 7.8%, 5yr projection |
| DCF Exit Multiple | Growth | $244.42 | 1.04x | yes | Exit EV/EBITDA: 4.0x / 5.2x / 7.2x (bear / base = today's held flat / bull), 5yr |
| Relative Valuation | Relative | $360.15 | 0.71x | yes | P/E 18x (static sector reference · 2026-04), scenarios: 15.2x / 18.0x / 20.8x (bear / base = reference held flat / bull), EV/EBITDA 9.29x |
| Simple DDM | Growth | — | — | no | — |
| Two-Stage DDM | Growth | — | — | no | — |
| Simple Excess Return | Asset | $138.03 | 1.84x | yes | BV/sh $73.87, ROE (TTM) 17.3%, ke 9.3% |
| Two-Stage Excess Return | Asset | $186.24 | 1.37x | yes | 5yr excess ROE then converge to ke=9.3% |
| Discounted Future Market Cap | Growth | $179.45 | 1.42x | yes | Rev $12.7B, growth -0% (input: historical growth; tapered), Terminal P/S: 0.7x / 0.8x / 0.9x (bear / base = today's held flat / bull, cap 8x) |
| Peter Lynch Fair Value | Relative | $144.00 | 1.77x | yes | EPS $12.00, growth 5% (input: historical EPS growth), PEG=4.08 (Overvalued) |
| Margin Trajectory | Growth | — | — | no | — |
| Earnings Power Value | Earnings | — | — | no | — |
| Residual Income | Asset | $186.72 | 1.36x | yes | BV $73.87 + 5yr PV of (ROE (TTM) 17.3% − Kₑ 9.3%) × BV; BV grows 8.8%/yr |
| Graham Number | Asset | $141.22 | 1.80x | yes | √(22.5 × EPS $12.00 × BVPS $73.87) — Graham's conservative floor |
| EV/EBITDA Relative | Relative | $670.72 | 0.38x | yes | EBITDA $2.38B × sector EV/EBITDA 12.0x |
| FCF Yield | Earnings | $67.37 | 3.77x | yes | FCF $478.0M / Kₑ 9.3% — zero-growth perpetuity |
| SBC-Adj FCF Yield | Earnings | — | — | no | — |
| Ben Graham Formula | Earnings | $183.70 | 1.38x | yes | EPS $12.00 × (8.5 + 2×4.9%) × (4.4 / 5.3%) |
| ROIC-Justified P/B | Asset | — | — | no | — |
| P/Sales Sector | Relative | $818.02 | 0.31x | yes | Revenue $12.66B × sector P/S 2.5x |
| PEG Fair Value | Relative | $87.89 | 2.89x | yes | EPS $12.00 × (PEG 1.5 × growth 4.9% (input: historical EPS growth)) → PE 7.3x |
| Earnings Yield | Earnings | $129.73 | 1.96x | yes | EPS $12.00 / required return 9.3% (Rf 4.3% + ERP 5.0%) |
| Funds From Operations Multiple | Relative | — | — | no | — |
| Clinical Phase NPV | Growth | — | — | no | — |
| Merton | Asset | — | — | no | — |
| V5 Mechanical | — | — | — | no | — |
Solvency
| Field | Value |
|---|---|
| Net debt | $9.6b |
| Net debt / NOPAT (after-tax) | 18.23x |
| Net debt / operating income (pre-tax) | 14.36x |
| Interest coverage | 1.7x |
| Share count CAGR (buyback) | -6.8% |
| Burning cash | no |
Bullet Takeaways
Ryder is a leasing and logistics business, so the right way to read it is by segment, not as one number. The price implies the supply-chain segment growing operating profit about 11% a year for five years, which the model flags as within range historically, though that segment's profit is currently falling.
The balance sheet looks alarming until you understand the model. Net debt sits near $9.4 billion against trailing operating income near $626 million, but that debt funds the leased truck fleet, an income-producing asset, the way a financial funds a loan book. The relevant lenses are return on equity (guided to 17% to 18%) and free cash flow ($700 million to $800 million expected), not corporate leverage ratios.
The near-term tension is clear. Fleet management and used-vehicle sales are carrying the company while supply chain and dedicated transportation earnings fall in a freight downturn. Management raised 2026 EPS guidance on contractual strength, but the segments the price is leaning on are the ones under pressure.
Bull Case
Valuing Ryder requires the sector lens, because a truck-leasing and supply-chain company does not look like a normal industrial on the surface. Its balance sheet carries roughly $9.4 billion of net debt, but that debt funds revenue-earning equipment leased to customers; the company "lease[s] revenue earning equipment to customers" under long-term contracts and recognizes revenue over time as it delivers the service (FY2024 10-K, accession 0000085961-25-000032). Read that way, the leverage is an asset-funding structure, and the relevant measures are return on equity and free cash flow, not net-debt-to-EBITDA. On those measures the business is healthy: trailing return on equity near 17%, book value per share around $72, and earnings per share near $12, with management guiding 2026 non-GAAP return on equity to 17% to 18% and free cash flow to $700 million to $800 million.
The contractual model is the durability the price is paying for. Over 90% of Ryder's revenue now comes from long-term contracts, which management argues insulates earnings from short-term freight volatility. The first quarter of 2026 showed it working where it matters: fleet management earnings before tax rose 6% to $99 million, helped by contractual business and used-vehicle sales. That recurring contractual base is the engine that lets Ryder raise guidance even while the broader freight market is soft.
The used-vehicle cycle is a second, underappreciated lever. Ryder expects roughly $500 million in proceeds from selling used vehicles in 2026, and gains on those sales drop to the bottom line. Combined with an ongoing multiyear efficiency program expected to add $70 million of incremental benefit in 2026 (toward a $170 million total), the company has self-help margin levers independent of freight demand. Management raised 2026 comparable EPS guidance to a $14.05 to $14.80 range and targets about 3% operating revenue growth. For the bull, this is an asset-backed compounder with a contractual revenue base, a residual-value tailwind, and a cost program, returning cash through a shrinking share count (down nearly 7% a year).
Bear Case
The previously defensible advantage being chipped away is in the two segments the market is paying the most for. The valuation decomposes the price into the supply-chain segment carrying the priced-in premium, implying about 11% operating-profit growth a year for five years. The problem is that supply-chain earnings are going the other direction: supply-chain earnings before tax fell 17% to $72 million in the first quarter of 2026, and dedicated-transportation earnings before tax fell 15% to $23 million, both hit by lower automotive performance and reduced fleet count in a prolonged freight downturn. When the segment that must grow 11% a year to justify the price is shrinking double-digits, the gap between what the price assumes and what the business is delivering is the bear case in a single comparison.
The freight downturn is structural to the moment, not a one-quarter blip. Reduced fleet count and weak automotive volumes are demand problems Ryder cannot fully offset with contracts, because contracts insulate pricing but not volume or fleet utilization. The contractual model that the bull case leans on is precisely what makes the supply-chain and dedicated segments slow to recover: long contracts do not reprice up quickly when demand softens, and they tie capital into assets earning less than planned. A 90%-contractual revenue base cuts both ways.
The used-vehicle tailwind is also a cycle, and cycles turn. Gains on used-vehicle sales are flattering current earnings, but residual values depend on the secondary truck market, which is itself sensitive to the same freight conditions pressuring the segments. If used-truck prices weaken, a meaningful piece of the earnings beat reverses. The valuation methods that anchor to current economics sit far below the price: the perpetual-growth DCF near $105, simple excess return near $135, and the blended central estimate near $163, all well under the $263 (June 28, 2026) quote, with the reasonable-value base near $144. The price is leaning on the relative multiple and on a supply-chain recovery that the freight cycle is actively delaying, and with interest coverage near 1.6 times on a heavily leveraged asset base, the equity has limited cushion if the recovery slips.
Valuation
Because Ryder is a multi-segment leasing and logistics business, the inversion works at the segment level. The supply-chain segment carries the priced-in premium, and at $263.18 the price implies that segment growing operating profit about 11% a year for five years, computed at a 7% cost of capital (floored from a slightly lower CAPM rate) with 5% terminal growth. Each one-point change in the cost of capital moves the implied growth rate sharply, about 13 points, so the figure is approximate. Historically only about half of comparable fast-growers sustained an 11% pace for five years, so the model labels the assumption within range but with limited comparison data, treated directionally.
The method families are noisy here, as they often are for asset-heavy lessors, so the pattern matters more than any single value. The growth and relative methods bracket a wide range: exit-multiple DCF near $250 is close to the price, while the perpetual-growth DCF near $105 and several relative methods swing from far below to far above on small multiple changes. The asset methods cluster lower: simple excess return near $135, two-stage excess return near $182, residual income near $182, Graham number near $140. The blended central estimate that survives the screen is about $163, and the reasonable-growth band runs from about $106 at the low to $144 at the base, with a high case near $445 that reflects how much the value swings on terminal assumptions.
The reconciliation: the price is justified by the relative multiple, while the asset and earnings methods say it is expensive against current earnings. The crucial caveat is solvency framing. Net debt near $9.4 billion looks extreme at 15 times operating income, but it funds the leased fleet, so the regulatory-style lenses for an asset-backed lessor (return on equity near 17%, free cash flow of $700 million to $800 million) are more meaningful than net-debt-to-EBITDA. The real question the valuation poses is whether the supply-chain segment delivers the growth the price embeds while it is currently in decline.
Catalysts
The most recent catalyst was the first-quarter 2026 report and the guidance raise. Comparable EPS was $2.54, up 3% year over year, and management lifted full-year 2026 comparable EPS guidance to a $14.05 to $14.80 range (GAAP $13.15 to $13.90), targeting about 3% operating revenue growth, non-GAAP return on equity of 17% to 18%, and free cash flow of $700 million to $800 million.
The segment trajectory is the key swing factor. Fleet management earnings before tax rose 6% on contractual business and used-vehicle sales, while supply-chain earnings before tax fell 17% and dedicated transportation fell 15% in the freight downturn. Each quarter's read on whether supply chain and dedicated transportation stabilize, and on whether the freight cycle is turning, is the most important marker for the thesis given that supply chain carries the priced-in premium.
Two specific levers to track: used-vehicle proceeds, expected around $500 million in 2026, where gains flatter earnings but depend on secondary truck prices; and the multiyear efficiency program, expected to add $70 million of incremental benefit in 2026. Continued buybacks, with the share count down nearly 7% a year, are the offsetting positive worth watching.
Sources: Ryder Q1 2026 results and 2026 outlook (Ryder newsroom, stocktitan.net, TipRanks, StockStory, Transport Topics).
Peer Cohorts (Per Segment, With Filing Citations)
Fleet Management Solutions (FMS) (reported)
- UHAL (U-Haul Holding Company)
- (no filing in the citation store)
- GATX (GATX CORP)
- (no filing in the citation store)
- WLFC (WILLIS LEASE FINANCE CORP)
- (no filing in the citation store)
- GXO (GXO Logistics, Inc.)
- (no filing in the citation store)
Supply Chain Solutions (SCS) (reported)
- GXO (GXO Logistics, Inc.)
- (no filing in the citation store)
- XPO (XPO, Inc.)
- (no filing in the citation store)
- CHRW (C.H. ROBINSON WORLDWIDE, INC.)
- (no filing in the citation store)
- HUBG (HUB GROUP, INC.)
- (no filing in the citation store)
- JBHT (J.B. HUNT TRANSPORT SERVICES, INC.)
- (no filing in the citation store)
- LSTR (LANDSTAR SYSTEM, INC.)
- (no filing in the citation store)
Dedicated Transportation Solutions (DTS) (reported)
- KNX (Knight-Swift Transportation Holdings Inc.)
- (no filing in the citation store)
- WERN (WERNER ENTERPRISES, INC.)
- (no filing in the citation store)
- SNDR (Schneider National, Inc.)
- (no filing in the citation store)
- JBHT (J.B. HUNT TRANSPORT SERVICES, INC.)
- (no filing in the citation store)
Methodology Note
- Priced-in inversion: the valuation is inverted on the current price to recover the operating-income growth, duration, and steady-state margin the price embeds (ROE for financials, FFO growth for REITs).
- Valuation x-ray: the valuation models, grouped into four families (asset, earnings, relative, growth). Each model is expressed as a price/FV ratio (distance from price), not a point fair-value estimate. The spread across families is the disagreement.
- Solvency: net cash/debt, net-debt-to-NOPAT, interest coverage, and share-count CAGR from EDGAR financials (net debt / FFO and fixed-charge coverage for REITs; regulatory-capital framing for financials).
- Peer cohorts: per-segment comparables with deep-linkable SEC filing citations.
Fundamentals sourced from SEC EDGAR filings. Current price from Databento. The priced-in inversion and valuation x-ray are computed by the boothcheck engine; narrative composed by AI from the structured data.