Greenbrier Analyst Slashes Estimates Post Q1 Results To Reflect Continued Operational Headwinds

Anusuya Lahiri
2 min read
0
In this article:

  • KeyBanc analyst Steve Barger maintained Sector Weight on Greenbrier Companies, Inc (NYSE: 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.

Latest Ratings for GBX

Date

Firm

Action

From

To

Dec 2021

Stephens & Co.

Upgrades

Equal-Weight

Overweight

Jul 2021

Susquehanna

Upgrades

Neutral

Positive

Jul 2021

B of A Securities

Upgrades

Underperform

Buy

View More Analyst Ratings for GBX

View the Latest Analyst Ratings

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