Monday, KeyBanc Capital upgraded Greenbrier Companies (GBX) shares to Buy from Hold with a price target of $7. The brokerage lowered its 2009 per share estimate to a loss of $0.04 from profit $0.10, and its 2010 EPS estimate to $0.71 from $1.37.
The brokerage reduced its 2009 per share estimate for American Railcar Industries (ARII) shares to a loss of $0.22 from profit $0.09, and its 2010 per share estimate to a loss of $0.25 from profit $0.40. The brokerage maintained its Hold rating on ARII stock.
The brokerage lowered its 2010 EPS estimate for FreightCar America Inc. (RAIL) shares to $0.44 from $0.86. The brokerage maintained its Buy rating on RAIL with a price target of $25.
The brokerage reduced its 2009 EPS estimate for Trinity Industries Inc. (TRN) shares to $1.04 from $1.30, and its 2010 estimate to $1.18 from $2.00. The brokerage maintained its Hold rating on TRN stock.
Analyst Steve Barger said that his call is not based on improving end market fundamentals, but rather on his view that even as industry conditions deteriorate GBX has options to forestall covenant violations or bankruptcy (which the shares increasingly seem to be anticipating). Further, the analyst considers GBX the likely target should consolidation finally occur.
With respect to overall industry conditions, based on the recent Rail Equipment Finance seminar, channel checks and the analyst's updated proprietary railcar utilization database, he has become directionally more bearish on the EPS outlook for the individual railcar OEMs. The analyst believes that an increasing number of parked cars, greater train speeds and continued loading weakness could result in a railcar downturn that persists through mid-2010.
As such, the analyst is reducing his 2009 railcar build estimate to 19,300 from 23,000 and his 2010 railcar build estimate to 17,000 from 28,125, and he is lowering his EPS estimates for the group. That said, as the analyst's thinking about the depth and duration of this railcar downturn worsens, he is less focused on trying to "nail" quarterly EPS results in these highly cyclical names.
Instead, the analyst has spent more time focusing on their respective competitive and liquidity positions, which is causing him to become more constructive on the idea of industry consolidation. In the analyst's view, American Railcar Industries and GBX are the most likely candidates for some sort of M&A activity, and he reminds investors of the February 2008 precedent when ARII majority owner Carl Icahn took a ~10% GBX stake when the shares were trading in the high-teens.
The analyst said that should this scenario transpire it would likely "fix" many of the specific issues ARII and GBX individually face, and would further lead to capacity rationalization and improved railcar pricing. Additionally, the analyst believes such an outcome would likely cause the entire group to rally significantly.
For investors who consider consolidation unlikely, the analyst considers it too early to buy the group on fundamentals. The analyst reiterated his view that the group's share price performance is highly correlated to industry backlog, which he expects to worsen in the near term.
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June 12, 2026 17:14 ET Major central bank action was the focus this week in economic news. The European Central Bank became the first major central bank to move in response to the rising inflationary pressures in the backdrop of the conflict in the Middle East. In North America, the U.S. inflation and trade data as well as Canada’s central bank decision gained attention. The Chinese trade data was the main news in Asia.