Author: Matt Elkott

Matt Elkott
Commentary

Cowen: Who Will Win the Locomotive Race?

Cowen and Company examines whether Caterpillar, Inc. could explore strategic alternatives for its transportation business, or at least the rail piece. An enterprise value-to-revenue multiple of 2.5x-2.75x may not be unreasonable, putting the transportation business value at approximately $12 billion.

Commentary

Rail Equipment Webinar Takeaways: Cowen

Tightness across a wide array of freight cars has continued, and with supply chain challenges limiting the industry’s ability to produce to demand, the lease rate momentum looks sustainable, according to expert panelists at Cowen and Company’s Jan. 19 webinar on the current state and outlook of the rail, locomotive, and railcar leasing and manufacturing markets.

Matt Elkott
Commentary

Cowen: GATX ‘Improving Return Dynamics’

GATX has taken advantage of low interest rates over the past few years to improve its debt profile, which is currently 90% fixed, with an average maturity of 10 years. Meanwhile, spot lease rates are expected to continue their seven-quarter run of sequential growth. This should lead to progressively higher returns for the company, which is now likely to focus on locking into much higher lease terms.

Commentary

Rail Equipment Conference Call Takeaways: Cowen

On May 31, we held a discussion with five expert panelists who provided insights into the current state and outlook of the rail, locomotive and railcar leasing and manufacturing markets. Overall, railcar demand recovery has been driven largely by freight cars, but our panelists indicated that tank car utilization and rates are rising. If this continues and eventually leads to higher tank builds, it could be a margin tailwind for manufacturers. As for the broader railcar market, inquiries remain strong, but labor and disruptions could limit production. Locomotive upgrades remain solid.

Matt Elkott
Commentary

Cowen: Wabtec Investor Day Insight

March 9 was Investor Day for Wabtec (WAB), and its five-year margin target is ahead of consensus for the next three years (the maximum available). Revenue and EPS targets are not inconsistent with Street expectations. Cowen and Company believes WAB’s geographic breakout could position it well as some rail commodities shift from Russia to other world regions.

Commentary

For Railcar Buyers, Time to Pull the Trigger, Soon

Takeaways from Cowen and Company’s recent Rail Equipment Webinar show that locomotive upgrades remain solid, as traffic growth continues. Elevated inquiries for newly built railcars should begin to translate into orders gradually, despite the steel premium. Lessors are well-positioned as freight demand rises, railcar supply decreases and new builds fall short of replacement levels this year.