Greenbrier Shares Drop 5.8% Despite Strong Q1 Result

Greenbrier Companies, Inc. (NYSE: GBX) reported stronger-than-expected fiscal Q1 results, topping both earnings and revenue estimates, driven by robust demand.

Despite the beat, shares of the freight equipment and services supplier dropped 5.8% to close at $44.69 on January 10.

Q1 Performance

Markedly, adjusted earnings of $0.32 per share, impressively beat analysts’ expectations of $0.21 per share. Furthermore, the EPS was significantly ahead of the loss of $0.30 per share reported in the prior-year period.

In addition, revenues jumped 36.5% year-over-year to $550.7 million, exceeding analysts’ estimates of $532.55 million.

The company reported orders for 6,300 new railcars valued at $685 million, while it recorded deliveries of 4,100 units.

During the quarter, Greenbrier achieved a book-to-bill ratio of 1.5x; exceeding the 1.0x mark of book-to-bill for the fourth consecutive quarter, driven by robust demand.

Dividend & Delivery Outlook

The Board declared its 31st consecutive quarterly dividend of $0.27 per share, payable on February 17, to shareholders on record as of January 27.

For FY22, based on current business trends and production schedules, the company expects increased deliveries of 17,500 – 19,500 units, including approximately 1,500 units in Greenbrier-Maxion (Brazil).

CEO Comments

Looking forward, CEO William A. Furman, commented, “the strength and flexibility of our global manufacturing and supply chain networks that support our integrated business model will sustain growth in a market environment that is characterized by strong underlying demand along with unique operating challenges.”

Sharing his views on the strong commercial and manufacturing operations momentum and increased scale of Greenbrier’s railcar lease fleet, he further added, “We expect the result will be an increasing baseline level of cash flows with substantial manufacturing upside as end markets continue to recover.”

Analysts Recommendation

Overall, the stock has a Strong Buy consensus rating based on 4 Buys and 1 Hold. The average Greenbrier stock price target of $52 implies 16.4% upside potential from current levels.

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