Thursday, October 24, 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 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.
On the path to greater profitability. While the company has broadened and diversified its product portfolio, we expect further growth into new areas such as producing tank cars which is expected to support margin expansion. Growth in the conversion and rebody business, along with increased parts sales, could enhance gross margins and reduce the company’s top-line sensitivity to the cyclicality associated with new railroad car orders. Additionally, we think FreightCar America will continue to improve its cost profile through productivity and efficiency gains.
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