Greenbrier Price Target Boosted to $62 Amid Strong Q4 Results

The Greenbrier Companies, Inc. (NYSE: GBX) has seen its price target raised to $62 from $60 at BofA Securities, following the company's strong fourth quarter and full-year 2024 results. The analyst firm, which maintained an "Underperform" rating on the stock, increased its price target based on the company's robust earnings performance, improved aggregate gross margin, and healthy backlog and deliveries.



Greenbrier reported net earnings of $62 million, or $1.92 per diluted share, on revenue of $1.1 billion in the fourth quarter. The company's earnings per share (EPS) of $1.92 topped the consensus estimate of $1.32 by $0.60. Greenbrier's strong earnings performance was driven by a robust aggregate gross margin of 18.2%, reflecting a 480 basis point year-over-year improvement. The company's gross margin improvement was a result of its efficiency initiatives and the growth of recurring revenue from its leasing platform.



Greenbrier's strong fourth quarter results capped off a solid full year, with the company reporting net earnings of $160 million, or $4.96 per diluted share, on revenue of $3.5 billion. The company's full-year EBITDA was $451 million, or 12.7% of revenue. Greenbrier's robust operating cash flow of $330 million in 2024 was the second-highest in the company's history.



Greenbrier's strong financial performance was supported by a healthy new railcar backlog of 26,700 units with an estimated value of $3.4 billion. The company delivered 7,000 units in the quarter and received new railcar orders for 4,400 units valued at $575 million. Greenbrier's lease fleet grew by 300 units to 15,500 units, with lease fleet utilization of nearly 99%.

BofA Securities analyst Ken Hoexter raised Greenbrier's price target from $42 to $50 on October 24, 2024, while maintaining an "Underperform" rating on the stock. Hoexter cited Greenbrier's strong earnings performance, improved aggregate gross margin, and healthy backlog and deliveries as key factors in his decision to raise the price target. However, the analyst's neutral rating suggests that he remains cautious about the company's prospects in the near term.



In conclusion, Greenbrier's strong fourth quarter and full-year 2024 results, coupled with a healthy backlog and deliveries, have led BofA Securities to raise the company's price target to $62. While the analyst firm maintains a neutral rating on the stock, the price target increase reflects the company's robust financial performance and positive outlook. Investors should closely monitor Greenbrier's progress and consider the company's strong fundamentals when making investment decisions.