Equipment analyst Matt Elkott offers perspectives on two of the rail industry’s biggest OEMs.
Author: Matt Elkott
At Cowen and Company, we are revising our transportation OEM and machinery earnings estimates for fourth-quarter 2020 and 2021, and introducing our 2022 estimates; updating our North American Class 8 production forecast; and fine-tuning our railcar supply demand model. What are we seeing? Gradually improving supply-side dynamics.
At Cowen and Company, we expect North American railcar demand to recover in 2021. One of the best-positioned suppliers? The Greenbrier Companies (GBX), with more than a 40% manufacturing share following the acquisition of ARI. Railcar markets in Europe and Brazil are also improving. All of this plus the cost-cutting measures GBX has taken make it our top 2021 pick.
Rail transit rail equipment is among the transportation equipment subsectors most likely to benefit from a potential “Blue Wave” in January following a Joe Biden/Kamala Harris win and the Democrats flipping enough seats in the U.S. Senate in the November Presidential election to take control of that chamber.* As well, a power shift in Washington could drive a public transit service recovery in the U.S.