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Trinity Industries (TRN)
NYSE:TRN
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Trinity Industries
(NYSE:TRN)72Outperform
Trinity Industries (TRN) vs. S&P 500 (SPY)
Market Cap
$2.41B
Dividend Yield3.87%
Average Volume (3M)582.89K
Price to Earnings (P/E)17.9
Beta (1Y)1.36
Revenue Growth3.21%
EPS Growth29.59%
CountryUS
Employees9,480
SectorIndustrials
Sector Strength66
IndustryTransportation
Share Statistics
EPS (TTM)1.65
Shares Outstanding81,789,390
10 Day Avg. Volume773,824
30 Day Avg. Volume582,891
Financial Highlights & Ratios
PEG Ratio0.61
Price to Book (P/B)N/A
Price to Sales (P/S)0.74
Price to Cash Flow (P/CF)7.70
P/FCF Ratio0.00
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$35.50Price Target Upside18.97% Upside
Rating ConsensusHold
Number of Analyst Covering2
Trinity Industries Business Overview & Revenue Model
Company DescriptionTrinity 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.
How the Company Makes MoneyTrinity Industries makes money primarily through its two main business segments: the Railcar Leasing and Management Services Group and the Rail Products Group. The Railcar Leasing and Management Services Group generates revenue by leasing railcars to customers across various industries, providing fleet management services, and offering maintenance services. The Rail Products Group contributes to the company's revenue by manufacturing and selling railcars and railcar parts to customers. Additionally, Trinity benefits from long-term leasing contracts and partnerships with key players in the transportation and logistics sectors, which provide a steady and recurring revenue stream. The company's ability to offer both leasing and manufacturing solutions allows it to capitalize on the growing demand for efficient rail transportation.
Trinity Industries Financial Statement Overview
Summary
Trinity Industries demonstrated strong revenue growth and improved profitability with a notable increase in gross and net profit margins. The company's balance sheet shows significant improvement, with no total debt and a reasonable return on equity, though the equity base is relatively small. Cash flow has turned around markedly, with strong operating and free cash flow generation.Income Statement
Trinity Industries demonstrated strong revenue growth with a 3.22% increase from 2023 to 2024. The gross profit margin improved to 21.70% in 2024, indicating enhanced operational efficiency. The net profit margin also rose to 4.50%, reflecting better profitability. The EBIT and EBITDA margins show significant improvements, underscoring operational resilience. However, the company faced challenges in previous years, including net losses in 2020 and 2021.82
Very Positive
Balance Sheet
Trinity Industries has significantly improved its financial position with no total debt by 2024, compared to previous years. The equity ratio stands at 14.80%, indicating a moderate proportion of assets financed by equity. The return on equity is 10.59%, showing a reasonable return for shareholders. However, the company’s equity base is relatively small compared to its total liabilities, which could be a potential risk if not managed carefully.75
Positive
Cash Flow
The company has shown a remarkable turnaround in its cash flow position, generating a strong operating cash flow of $588.1 million in 2024, with a substantial free cash flow increase from a deficit in 2023 to a positive $588.1 million. The operating cash flow to net income ratio is robust, indicating good cash generation relative to net income. The free cash flow to net income ratio is also favorable, suggesting efficient cash utilization.88
Very Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 3.08B | 2.98B | 1.98B | 1.52B | 2.00B | Gross Profit |
| 668.20M | 527.10M | 367.70M | 354.50M | 491.00M | EBIT |
| 491.50M | 417.00M | -92.50M | -89.30M | -157.40M | EBITDA |
| 491.50M | 707.70M | 458.00M | 439.90M | -68.30M | Net Income Common Stockholders |
| 138.40M | 106.00M | 98.90M | 39.30M | -226.10M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 228.20M | 105.70M | 79.60M | 167.30M | 132.00M | Total Assets |
| 8.83B | 8.91B | 8.72B | 8.24B | 8.70B | Total Debt |
| 5.69B | 5.75B | 5.61B | 5.17B | 5.02B | Net Debt |
| -228.20M | 5.65B | 5.53B | 5.00B | 4.88B | Total Liabilities |
| 7.53B | 7.63B | 7.45B | 6.94B | 6.69B | Stockholders Equity |
| 1.31B | 1.04B | 1.01B | 1.03B | 1.74B |
| Cash Flow | Free Cash Flow | |||
| 588.10M | -414.50M | -979.60M | 41.00M | -52.80M | Operating Cash Flow |
| 573.80M | 295.60M | -12.80M | 611.80M | 651.70M | Investing Cash Flow |
| -214.60M | -363.00M | -260.70M | 276.30M | -532.90M | Financing Cash Flow |
| -219.90M | 8.20M | 265.40M | -814.10M | -168.00M |
Trinity Industries Technical Analysis
Negative
29.84
Price Trends
35.28
Negative
35.73
Negative
33.38
Negative
Market Momentum
-1.84
Positive
27.46
Positive
11.83
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TRN, the sentiment is Negative. The current price of 29.84 is below the 20-day moving average (MA) of 33.29, below the 50-day MA of 35.28, and below the 200-day MA of 33.38, indicating a bearish trend. The MACD of -1.84 indicates Positive momentum. The RSI at 27.46 is Positive, neither overbought nor oversold. The STOCH value of 11.83 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for TRN.
Trinity Industries Risk Analysis
Trinity Industries disclosed 39 risk factors in its most recent earnings report. Trinity Industries reported the most risks in the “Production” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Trinity Industries Peers Comparison
Overall Rating
UnderperformOutperform
Sector (62)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
80 Outperform | $147.27B | 21.79 | 39.95% | 2.20% | 0.54% | 6.06% | |
75 Outperform | $1.68B | 9.29 | 13.71% | 2.24% | -9.47% | 69.11% | |
74 Outperform | $54.01B | 20.61 | 18.33% | 2.26% | -0.27% | 43.87% | |
72 Outperform | $2.41B | 17.91 | 14.57% | 3.87% | 3.21% | 29.59% | |
69 Neutral | $30.35B | 29.41 | 10.46% | 0.47% | 7.34% | 32.91% | |
62 Neutral | $8.11B | 13.34 | 1.17% | 3.02% | 4.16% | -15.14% | |
57 Neutral | $141.81M | ― | 156.43% | ― | 52.11% | -234.65% |
* Industrials Sector Average
Performance Comparison
TRN
Trinity Industries
29.84
5.23
21.25%
RAIL
Freightcar America
7.90
4.88
161.59%
GBX
Greenbrier
55.32
5.44
10.91%
NSC
Norfolk Southern
238.64
-10.18
-4.09%
UNP
Union Pacific
243.61
-1.87
-0.76%
WAB
Westinghouse Air Brake Technologies
179.89
39.18
27.84%
Trinity Industries Earnings Call Summary
Earnings Call Date: Feb 20, 2025 | % Change Since: -12.77% | Next Earnings Date: Apr 30, 2025
Earnings Call Sentiment Neutral
Trinity Industries showcased strong financial performance in 2024, with significant improvements in earnings per share and return on equity. The leasing and services segment performed well, and there are positive market signals for 2025. However, challenges such as uncertainty around tariffs, lower expected railcar deliveries, and increased maintenance costs present headwinds for the upcoming year.Highlights
Strong Financial Performance in 2024
Trinity Industries reported a full-year adjusted EPS of $1.82, a 32% year-over-year increase, and an adjusted ROE of 14.6%. Cashflow from operations with net gains on lease portfolio sales was $645 million, reflecting a 65% increase over 2023.
Leasing and Services Segment Success
The leasing and services segment generated revenues of $287 million in Q4 and $1.1 billion for the full year 2024, with a segment operating profit of $121 million and a margin of 42%. The lease fleet utilization rate was 97%.
Positive Market Signals
There are positive volume signals in the agricultural, chemicals, and intermodal segments, with elevated inquiry levels for 2025 and anticipated acceleration in orders as policy changes become more explicit.
Parts Business Growth
The parts business performed exceptionally well in 2024, focusing on expanding to support the lease fleet and maintenance network, with promising opportunities for growth.
Lowlights
Challenges in Manufacturing Due to Tariffs
Uncertainty around tariffs has led to deferred investment decisions by customers, impacting railcar orders and potentially risking the 2025 guidance.
Lower Railcar Deliveries Expected in 2025
Trinity Industries expects 2025 industry deliveries of approximately 35,000 railcars, about 20% lower than 2024 deliveries.
Increased Maintenance Costs
Higher maintenance costs are anticipated due to compliance intervals for railcars, which will weigh down leasing and services margins into 2025.
Company Guidance
During the Trinity Industries conference call, guidance for 2025 was discussed with several key metrics highlighted. The company anticipates 2025 industry deliveries to be approximately 35,000 railcars, reflecting a 20% decrease from 2024. The guidance for 2025 EPS is set within the range of $1.50 to $1.80 per share, with an expected tax rate of 25% to 27%. Trinity projects net lease fleet investments to be between $300 million and $400 million, while manufacturing capital expenditures are estimated at $45 million to $55 million. The leasing and services segment is expected to maintain operating margins between 38% and 41%, with gains on lease portfolio sales anticipated to be between $40 million to $50 million. The rail products segment is expected to achieve a full-year operating margin between 7% and 8%. Additionally, the company plans to achieve approximately $40 million in SG&A cost savings, including reductions in incentive compensation.Trinity Industries Corporate Events
Financial Disclosures
Trinity Industries Reports Strong 2024 Financial Results
Positive
Feb 20, 2025
Trinity Industries, Inc. announced its financial results for the fourth quarter and full year ending December 31, 2024, reporting a full-year GAAP and adjusted earnings from continuing operations of $1.81 and $1.82 per diluted share, respectively. The company experienced a 32% increase in full-year adjusted EPS, attributed to higher lease rates, improved margin performance, and increased external repairs. Trinity delivered 17,570 railcars in 2024 with a year-end backlog of $2.1 billion. Despite a 20% expected decrease in industry deliveries for 2025, Trinity maintains a positive outlook with a projected EPS guidance of $1.50 to $1.80, reflecting continued leasing revenue improvement and consistent operating margins.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.