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Trinity (TRN) Shares Decline 4.7% Since March: Here's Why

Zacks Equity Research
·2 min read

Trinity Industries, Inc.‘s TRN shares have dropped 4.7% of value since March compared with the industry’s 5.8% decline.

Reasons for Dismal Performance & Looking Ahead

Like other equipment and leasing companies, Trinity is also reeling under the effects of the coronavirus pandemic. Dismal performance of Trinity’s Rail Products Group is a concern. The segment’s below-par performance is due to low railcar deliveries and reduced operational efficiency. Segmental revenues declined 31.8% in the first six months of 2020.  

Mainly due to coronavirus-related disruptions, the companyreported lower-than-expected earnings per share in the first two quarters of 2020.

Coronavirus concerns might put pressure on Trinity’s shipping volumes at least in the near term. To combat the unprecedented crisis, the company cut back on non-essential expenses. It expects to generate savings to the tune of $70 million in 2020 owing to its cost-reduction efforts in the current turbulent scenario. However, lower investments, however, might hamper its growth prospects.

The negativity revolving around the stock is evident from the Zacks Consensus Estimate for current-year earnings being revised downwards from 38 cents per share to 29 cents in the past 60 days.

Zacks Rank & Stocks to Consider

Trinity currently carries a Zacks Rank #5 (Strong Sell).

Some better-ranked stocks in the Zacks Transportation sector are Knight-Swift Transportation Holdings KNX, United Parcel Service, Inc. UPS and Werner Enterprises WERN. All the stocks carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here.

Long-term expected earnings per share (three to five years) growth rate for Knight-Swift, UPS and Werner is pegged at 15%, 7.7% and 8.5%, respectively.

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Zacks Investment Research