FreightCar America (RAIL) – Positive Momentum Driven by Potential for Market Share Gains and Margin Expansion


Tuesday, August 27, 2024

Mark Reichman, Managing Director, Equity Research Analyst, Natural Resources, Noble Capital Markets, Inc.

Refer to the full report for the price target, fundamental analysis, and rating.

Pure play manufacturer. FreightCar America, Inc. is a diversified manufacturer of railroad cars and rail car components. The company designs and manufactures a broad variety of railroad car types for the transportation of bulk commodities and containerized freight products primarily in North America. The company recently reported strong second-quarter financial results and appears poised for greater scale and margin expansion as it increases its market share and expands its product suite.

Updating estimates. While our 2024 and 2025 earnings per share estimates are unchanged at $0.25 and $0.47, respectively, we have increased our EBITDA estimates to $38.8 million and $46.7 million from $38.6 million and $46.0 million. We have assumed modestly higher sales. Importantly, we have increased our forward estimates beginning in 2026 to better reflect the company’s recent order for 1,000 tank car conversions and entry into the new tank car market beginning in 2028 which is expected to have a positive impact on gross margin.


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*Analyst certification and important disclosures included in the full report. NOTE: investment decisions should not be based upon the content of this research summary. Proper due diligence is required before making any investment decision. 

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