NEW YORK (AP) — A Raymond James analyst boosted truck-leasing company Ryder System Inc.'s rating and price target on Friday, in part because of its long-term growth potential.

THE SPARK: Analyst Arthur Hatfield upgraded the company to "Strong Buy" from "Outperform" and increased his price target to $74 from $60.

THE ANALYSIS: In a client note the analyst said that Ryder is performing a significant fleet replacement that has lowered the average age of its trucks, which helps to cut maintenance costs and improve margins. Even though the company had to put forth a large amount of capital for the fleet replacement, Hatfield believes "the long-term returns from these actions are justifiable and significant."

And while the size of Ryder's fleet is expected to drop this year, Hatfield said increased use of a smaller fleet should offset lower demand.

"Ryder's right-sizing actions have enabled it to drive meaningful rate improvement on a smaller fleet and generate much improved revenues per unit," he wrote.

STOCK ACTION: Ryder System rose $1.10 to $59.31 in afternoon trading. Over the past year the stock has traded between $32.76 and $61.68. The shares are up 17 percent for the year-to-date.