Matt Elkott, an analyst from TD Cowen, has initiated a new Buy rating on Trinity Industries (TRN).
Matt Elkott has given a Buy rating for Trinity Industries (TRN) due to an assortment of reasons.
The primary factors influencing this rating were the recent border issues that have disrupted TRN’s deliveries, and the subsequent impact on investor perception of the company’s execution. Elkott adjusted his 3Q23 and FY23 EPS estimates downward, and increased his 2024 estimate in response to the anticipation of deliveries being deferred. Despite a drop in the SOTP price target from $34 to $32, Elkott maintains the Buy rating, expecting the shares to face some pressure in the immediate future.
Elkott’s rating was also influenced by the company’s announcement of a delivery shortfall of 685 units in 3Q23, due to the closure of the U.S.-Mexico border. This, coupled with increased state vehicle inspections leading to truck traffic congestion, has had a negative impact on TRN’s supply chain. To reflect these disruptions, Elkott has lowered his 3Q23 EPS estimate and also his 4Q23 EPS estimate due to the persistence of some disruptions. However, he has increased his 2024 EPS estimate, assuming that some deliveries will be deferred to the following year and that supply chain issues will alleviate. Despite these challenges, Elkott continues to see TRN as well positioned to capitalize on the ongoing strength in lease-rates and the multiyear lease revenue growth it is expected to drive.
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Trinity Industries (TRN) Company Description:
Trinity Industries, Inc. engages in the provision of rail transportation products and services in North America. It operates through the following segments: Railcar Leasing and Management Services Group, Rail Products Group and All Other. The Railcar Leasing and Management Services Group segment provides railcar industry services. The Rail Products Group segment includes the results of heads business. The All Other segment includes the results of highway products business. The company was founded in 1933 and is headquartered in Dallas, TX.
Read More on TRN:
- North American rail traffic up 1.7% for the week ending September 23
- North American rail traffic down 0.8% for the week ending September16
- North American rail traffic down 3% for the week ending September 9
- North American rail traffic down 5.2% for the week ending September 2
- North American rail traffic down 6.2% for the week ending August 26
