Greenbrier Posts Wider-Than-Expected 1Q Loss; Top Analyst Says Buy

Greenbrier Cos. reported lower-than-expected 1Q results. Meanwhile, the railroad car and equipment manufacturer extended its share repurchase plan by $100 million through January 2023.

Greenbrier (GBX) posted an adjusted loss of $0.30 per share, compared to the year-ago profit of $0.23. Analysts had forecasted a loss of $0.07 per share. The company’s 1Q revenue of about $403 million declined 47.6% year-over-year and missed the Street consensus of 367.73 million.

During the quarter, Greenbrier received new orders for 2,900 railcars, valued at about $260 million. The company’s diversified new railcar backlog stood at 23,900 units, reflecting an estimated value of $2.35 billion as of November 30, 2020.

Greenbrier also announced a quarterly dividend of $0.27 a share to be paid on Feb. 16 to shareholders of record as on Jan. 26. Its annual dividend of $1.08 per share reflects a dividend yield of 2.96%.

Greenbrier’s CEO William A. Furman said that the company is focusing on generating operating cash flows through efficient manufacturing and is also working on lowering its debt. The company reduced its debt levels by $80 million in 1Q. (See GBX stock analysis on TipRanks)

Following 1Q results, Cowen & Co. analyst Matt Elkott maintained a Buy rating and a price target of $41 (12.5% upside potential). In a note to investors, Elkott said, “Deliveries and gross margin fell short of our expectations, while orders were 32% above our estimate.” He further added, “The results affirm our near-term caution, but we would view today’s likely weakness as a unique buying opportunity.”

Overall, consensus among analysts is a Moderate Buy with 2 analysts recommending a Buy rating, while 1 analyst suggesting a Hold. The average price target of $36 implies downside potential of around 1.3% over the next 12 months. Shares have advanced 19.9% over the past year.

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