Shares of Lake Oswego, OR-based The Greenbrier Companies GBX climbed 5.51% to $30.85 on Dec 15 following bullish data released by the company on railcar orders. The company said that it has already received orders for 1,800 new rail car units worth approximately $170 million since the commencement of fiscal 2016 on Sep 1 this year.
The orders received are diverse in nature and includes automobile carrying railcars, boxcars, large cube covered hopper cars apart from non-energy tank cars for the North American and European markets. The railcar maker further stated that December has emerged as the most promising month in terms of new orders as 1,300 of the 1,800 orders have been received this month. The other 500 orders were received in the first quarter of fiscal 2016.
Apart from the bullish update on railcar orders, the company also reaffirmed its guidance for fiscal 2016, which was originally provided in October while unveiling impressive fourth quarter fiscal 2015 results. The company still expects deliveries in the range of 20,000 to 22, 500 units. Revenues are still projected to exceed $2.8 billion and earnings per share are expected in the band of $5.65 to $6.15. The Zacks Consensus Estimate for fiscal 2016 earnings per share currently stands at $5.95, within the guidance range. The Zacks Consensus Estimate for fiscal 2016 revenues currently stands at $2.83 billion, in line with the projection.
The upsurge in stock price comes as a welcome relief for Greenbrier whose shares have lost 42.58% so far this year despite the company having a successful track record with respect to earnings. The company has outperformed the Zacks Consensus Estimate in three of the last four quarters with an average beat of 16.47%. Concerns that the decline in crude prices will lead to a fall in tank-car orders may have led to the shoddy stock price performance. However, management is not overtly perturbed as can be gauged from the recent decision to hike its quarterly dividend by 33% to 20 cents per share.
Zacks Rank
Greenbrier currently carries a Zacks Rank #3 (Hold). Better-ranked stocks in the broader transportation sector include American Railcar Industries, Inc. ARII, Avolon Holdings Limited AVOL and Southwest Airlines Co. LUV. All three stocks hold a Zacks Rank #2 (Buy).
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