It is an exciting time for Greenbrier Companies (NYSE: GBX) investors, although it isn't exactly an exciting company. The business manufactures, markets, services and leases railroad cars. The takeaway from the FQ2 results is that business is solid, and the outlook is firming: an outlook for sustained operational quality, a pivot back to growth and widening margins. What this means for investors is that the lightly-valued, 2.25% yielding stock is on track to continue rallying higher in 2024 and will likely set new long-term highs by year end.
Greenbrier Companies Exceeds Expectations and Guides Higher
Greenbrier Companies had a decent quarter in Q2 despite the YOY decline in business. The decline is primarily due to transportation market normalization following the supply chain hiccups of 2021 and 2023, and a revenue trough is forming. The $863 million in net revenue is 250bps better than expected, and the margin details are also solid. All operating segments were strong, with sequential growth in the primary manufacturing segment approaching 10%.
The margin is good. The company experienced some contraction sequentially, but the margin expanded compared to last year, providing a slight earnings growth on the bottom line. The GAAP $1.03 is 13 ...