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According to a research report published today, KeyBanc has downgraded American Railcar Industries
ARII from Buy to Hold, and reduced 2012 estimates as well.
In the report, KeyBanc commented, “We continue to think ARII's efforts at diversification will put the Company is a much better position vis-à-vis longer-term earnings stability as the Company navigates future cycles. Specifically, we think its efforts to grow its railcar leasing exposure will provide much more EPS visibility and stability. Additionally, we think its increasing international exposure (via its joint ventures and engineering and licensing agreements with India and Russia) will help diversify away from the North American railcar cycle. In our view, these initiatives represent smart and proactive efforts to reduce cyclicality, which should be viewed positively by investors. However, in the near term we expect sales from its domestic OE railcar business will be the primary driver of earnings, and the pace of orders for the industry will be the dominant driver of share price.”
American Railcar Industries closed Friday at $27.59.
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