Stephens Bumps Up Greenbrier Price Target By 36%

Stephens analyst Justin Long upgraded Greenbrier Companies Inc GBX to Overweight from Equal Weight and raised the price target to $56 (an upside of 26.6%), from $41, as the analyst believes the North American railcar market is poised for an elongated recovery after a multi-year run of volatile and challenging trends.

• Long mentions, as the rail industry focuses on improving the pace of volume growth, largely from truck-to-rail conversions, Greenbrier is well-positioned to benefit.
• He also notes the company's exposure to the European railcar market, where "the secular growth dynamics could be even more powerful," and structural enhancements to its business, such as GBX Leasing.
• Recently, United States Steel Corp X, Norfolk Southern Corp NSC, and Greenbrier jointly announced a new, more sustainable steel gondola railcar. Using an innovative formula for high-strength, lighter-weight steel developed by U. S. Steel, each gondola's unloaded weight is reduced by up to 15,000 pounds. Norfolk Southern will initially acquire 800 of the Greenbrier engineered gondolas.
• Price Action: GBX shares are trading higher by 4.64% at $44.23 on the last check Friday.