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Ryder Systems (R) reported earnings Tuesday. It was a solid report for the logistics and fleet management company. This should bode well for the stock going forward.

Highlights from the earnings report:

  • The company beat earnings expectations by a penny a share, and revenue topped estimates by $20mm.
  • Earnings rose an impressive 36% Y/Y.
  • This was the fifth straight quarter of double digit growth in earnings.
  • Ryder expects second-quarter profit of $1.07 to $1.12 a share, compared to the analyst forecast of $1.07 a share.

4 additional reasons Ryder is undervalued at under $49 a share:

  • Ryder is selling substantially under analysts' price targets. The consensus price target on R by the 11 analysts that cover the stock is $65 a share. S&P has a "Buy" rating and a $69 price target on Ryder.
  • The stock has a forward PE of just over 10, which is substantially under the historical average of 15 times forward earnings.
  • This quarter marked the fourth quarter of five that the company significantly beat estimates. Consensus estimates for FY2012 are for $4.04 a share and $4.75 a share in FY2013. Based on this earnings report, I would look for these numbers to be revised up in the near future.
  • The stock is selling for just 40% of annual revenues, produces operating cash flow north of $1B/year and has a very reasonable five year projected PEG (1.25).
Source: Ryder Systems Is Riding High