Baird downgrades Ryder stock rating on elevated expectations

Baird has reduced its rating on Ryder Systems stock to Neutral from Outperform, lowering its price target from $290 to $245. The stock is currently trading at $233.93, which analysts consider overvalued relative to its fair value. Baird attributes the downgrade to elevated expectations and a tough backdrop for a near-term earnings recovery, rather than issues with Ryder's underlying business.

The firm has revised its 2027 earnings estimate to $16.02 per share, below the consensus of $17.87. Ryder's PEG ratio of 3.64 indicates the stock is trading at a premium to its growth prospects. Higher interest rates, record-high fuel prices, and pressure on smaller carriers could weigh on the company's capital-intensive leasing model and truck market recovery. Despite recent positive earnings results, Ryder's stock declined in pre-market trading.