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Ryder System (R) Shares Down 19% in a Month: Here's Why

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Shares of Ryder System (R - Free Report) have lost 19.3% compared with the industry's  0.6% decline in the past month. The stock underperformed the industry primarily due to weak used vehicle sales. Soft freight conditions have mainly lowered used vehicle sales.

Let’s take a look at the factors that are responsible for the dismal price performance.

Ryder is plagued by below-par used vehicle sales thanks to low pricing and increased wholesaling activity. Weak freight conditions led to this downside.  Moreover, bleak freight scenario is expected to persist at least until the second half of the year.

Ryder expects revenues in the Dedicated Transportation Solutions segment to drop 1% in 2020 due to reduced sales activity and fewer large deals signed in the latter half of 2019.The downturn in the Supply Chain Solutions unit due to loss of business is another concern. Notably, revenues in the segment slid 3% in the fourth quarter of 2019. The adversity is anticipated to continue through the middle of 2020.

Moreover, with Ryder investing substantially in its contractual lease fleet, capital expenditures are increasing, thereby hurting the bottom line. High debt levels further add to its woes.

Negative Estimate Revisions & Weak Momentum  Score

The negativity surrounding the stock is evident from the Zacks Consensus Estimate for current year earnings being revised downward by 29.8% in the past 60 days to $1.77.

The company’s Momentum Score of F further highlights its short-term unattractiveness.

Additionally, Ryder carries a Zacks Rank #5 (Strong Sell).

Stocks to Consider

Some better-ranked stocks in the Zacks Transportation sector are Delta Air Lnes (DAL - Free Report) , Ryanair Holdings (RYAAY - Free Report) and Azul S.A. (AZUL - Free Report) . Delta carries a Zacks Rank#2 (Buy), while Ryanair and Azul sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Shares of Delta , Ryanair and  Azul  have rallied more than 6%, 5% and 17%, respectively, in a year.

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