Ryder Rides a 25% Stock Pop Into an EPA '27 Squeeze

Ryder (NYSE: R) shares jumped 25.22% to $265.53 after third-quarter earnings landed Thursday — a gain of more than a tenth of the company's value in a single session, and still about 7% below the 52-week high of $284.25 set on June 12.

The strong quarter handed CEO John Diez a pleasant problem: how to power growth with new trucks just as the EPA's 2027 nitrogen oxide rules loom over every Class 8 purchase. The short answer, for now, is cautiously — and with an eye on OEM build slots.

Are customers pre-buying ahead of the EPA '27 rules?

Not really. One analyst asked the question directly on the earnings call: "Are your customers hesitant to be placing orders for '27 now? Does this impact you?"

Diez said Ryder has not seen any "pre-buy surge activity with the change in technology." Tom Havens, president of Ryder's Fleet Management Solutions — the unit housing leasing and rental — was blunter on the economics. "It's pretty well understood at this point that price increases are coming in 2027," he said. "And despite that, there was not any significant prebuy activity" in the quarter.

Some customers "took advantage of it, but not to any large extent," Havens added.

The hesitation is rational. The EPA has opened an amendment process to the initial NOx rule, including noncompliance penalties and changes to "deratement" rules — the systems that slow or stop a truck when diesel exhaust fluid runs low. Committing capital to compliant vehicles before the final rule exists is a gamble few fleets seem willing to take.

Can Ryder actually grow the fleet?

Jeffrey Kauffman of Citizens JMP Securities flagged that Ryder's fleet counts sit below historic norms, particularly for tractors. Adding new tractors "is going to be kind of tough over the next six to nine months just because of the EPA mandate," he said, before asking whether Ryder had locked up enough OEM "slots" to cover rising demand.

Diez's answer: "Confident we can grow that fleet." Ryder has "already taken action in the quarter of starting to bring in equipment," visible in the capital expenditure budget. He offered one caveat — utilization "is not yet to screaming red levels like we saw post-COVID, but it will get there if we don't have fleet."

The numbers back him up. Rental utilization hit 77% in the quarter, up from 70% a year earlier, and stands at 73% for the nine months. For context, the post-COVID peak in the second quarter of 2022 was 81.6%. Ryder isn't there yet. The direction of travel is clear.

What does thin used-truck inventory change?

Plenty. Used vehicle sales remain a key earnings driver, and Ryder's inventory sits at 7,300 units — the low end of its roughly 7,000-unit target range, and down from 8,500 a year ago.

"We're going to continue to sell through that inventory," Diez said. With the used market tight, Ryder expects to shift more volume to retail rather than wholesale channels, which generally carry better margins. Retail was 61% of used vehicle sales in the quarter, versus 54% in the third quarter of last year and 56% sequentially against Q2.

Diez forecast that retail share will cross 70% in 2027. "We have that lever for us based on the thin inventories we expect to face later next year," he said. "That's the biggest hedge against market forces."

The money is already moving. Ryder had forecast a $40 million full-year gain on used vehicle sales — up $20 million from 2025 — but Diez now projects $50 million to $60 million. That's a roughly 25-50% upgrade on a forecast made months ago, not years.

Diez closed the equipment discussion with a promise: "When we get back together, we'll give you a look at the full year for 2027."

What about drivers?

Ryder's Dedicated Transportation Solutions segment doubles as a wage barometer. John Sensing, president of DTS and Supply Chain Solutions, said the unit is seeing "about a mid to single digit wage increase in certain regions." Contracts include "annual CPI openers" that pass wage increases to customers, plus "driver wage indices" that let Ryder reopen discussions if the market shifts sharply.

He cautioned that Ryder's driver market isn't a proxy for the broader one. DTS often works in specialized niches, and "80% of our jobs are home every day or every night. So that's very attractive." Not every carrier can say the same.

Between rising utilization, a sub-target used-truck inventory and a 2027 rulebook still being rewritten, Ryder's growth plan now depends on equipment arriving before demand does. Expect the January call to fill in the rest of that math.