- KeyBanc analyst Steve Barger maintained Sector Weight on Greenbrier Companies, Inc GBX. GBX shares saw a sharp decline following its F1Q23 results and call.
- Barger wrote that a sizable margin and EPS miss drove the decline in the quarter despite steadily improving revenue per car over the past six quarters.
- These results met with broad manufacturing and supply initiatives designed to improve efficiency, which could catalyze better results in the coming quarters.
- While this is a disappointing quarter in the context of a modest but persistent upcycle, perhaps the more important takeaway is how little patience investors will have for operational missteps in an environment of higher rates and cycle concerns.
- Barger reduced the FY23 EPS estimate to $2.15 from $2.71 (consensus $2.55).
- The revision reflects higher revenue from higher ASP and car but a lower margin.
- Barger also reduced the FY24 EPS estimate to $2.71 from $3.09 (consensus $2.95). The estimate reduction reflected higher revenue from higher ASP offset by lower margin expectations.
- GBX primarily drives margin expansion by improving its manufacturing footprint and managing supply chain costs.
- GBX's actions include investing in bringing critical component fabrication in-house; ceasing railcar production at its Portland, OR, facility; and conducting a strategic evaluation of its Marine business.
- The analyst thinks these are steps in the right direction but remain concerned about the timing of potential benefits relative to macro concerns.
- Barger sought a more straightforward path to consistency before becoming more constructive.
- Price Action: GBX shares traded higher by 1.64% at $29.13 on the last check Monday.
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GBXGreenbrier Companies Inc
$43.78-0.30%
Edge Rankings
Momentum
23.52
Growth
41.08
Quality
90.12
Value
93.95
Price Trend
Short
Medium
Long
© 2025 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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