Ryder System, Inc. announced an increase in its long-term Return on Equity (ROE) target over the cycle from high teens to low 20s. This revised target reflects the company's confidence in its transformed business model and ongoing strategic initiatives.
The company's balanced growth strategy, initiated in late 2019, has focused on de-risking the business, enhancing its return profile, and accelerating growth in asset-light Supply Chain Solutions (SCS) and Dedicated Transportation Solutions (DTS) segments. This transformation has already resulted in a 2024 adjusted ROE of 16%, compared to 13% during the prior freight cycle peak in 2018.
Management expects to achieve this new ROE target through continued execution of strategic initiatives, including the final phase of lease portfolio repricing, an additional $50 million in maintenance cost savings, and $40 million to $60 million in synergies from the Cardinal Logistics acquisition. These structural changes are designed to enhance returns regardless of freight cycle conditions.
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