Bank of America cut its rating on Greenbrier Companies ( NYSE: GBX ) to Neutral from Buy after warning that the margin recovery story could take longer than anticipated to play out.
"While recovering demand is countering pressure from a weak North American railcar demand market, margins are anticipated to see further pressure on rising input costs," warned analyst Ken Hoexter.
Hoexter noted that valuation on GBX remains near the mid-point of its historical range. The expectations is that with an uncertain margin outlook, shares will remain range bound in the near term.
The firm assigned a price objective of $33 to GBX vs. the 52-week trading range of $29.70 to $53.47.
Shares of GBX fell 9.27% on Monday, turning lower after BofA issued its downgrade late in the day.
The Seeking Alpha Quant Rating on GBX also recently turned more cautious with a Hold rating replacing a Buy rating.
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Greenbrier tumbles after BofA pulls bull rating