Ryder System (R) Morgan Stanley's 14th Annual Laguna Conference summary

Business transformation and strategy

• Achieved seven consecutive quarters of earnings growth through a balanced growth strategy and structural business changes, focusing on resilience during freight downturns.

• Shifted to an asset-light model, de-risked operations, and enhanced returns and cash flows, resulting in an 18% ROE.

• Emphasized disciplined customer selection to ensure stability across cycles and benefit from upturns.

• Investing in technology and operational excellence to support innovation and customer-focused solutions.

• Acquisitions have expanded end-to-end supply chain capabilities, positioning for future growth.

Financial outlook and guidance

• Raised the low end of 2026 EPS guidance to $14.40, driven by improved used vehicle sales outlook.

• Used vehicle pricing saw two consecutive quarters of mid-single digit growth, supported by market capacity tightening and higher new equipment costs.

• Rental demand remains at seasonal levels, with no significant uptick expected in the near term.

• Targeting at least $250 million in additional earnings from transactional businesses as the market recovers.

• Strategic initiatives are on track to deliver $70 million this year, completing a $170 million program, with $250 million targeted at the next cycle peak.

Segment performance and market dynamics

• Rental fleet size reduced by 20% from pre-COVID levels, with utilization targets achieved through de-fleeting.

• Dedicated solutions are benefiting from tight driver capacity, rising equipment and insurance costs, and a strong pipeline, with growth expected into 2027 and beyond.

• Supply chain segment experiencing slower ramp-up due to customer volume delays and capital priorities, but maintains a strong sales pipeline.

• Automotive exposure impacted by plant retooling and a lost customer, with year-over-year headwinds expected to normalize after Q3.