Cowen and Company recently released its Railcar Industry Forecast, which predicts 21% and 9% declines in deliveries and orders, respectively, this year.
Unless rail customers own their own railcars, they either use ones owned by the railroad or they lease them. One of the largest freight car and locomotive lessors is GATX Corp., which serves customers in several areas of the world. When a customer leases freight cars, the lessor expects them to be returned in good condition.
Reporting on the Cowen and Company Global Transport Conference in Bosto, Managing Director and Railway Age Wall Street Contributing Editor Jason Seidl and analysts Matt Elkott and Adam Kramer offer these observations taken from the conference’s railcar/locomotive builder and Class I railroad panels, with a large trucker and a logistics/LTL company added for deeper perspective:
A looming U.S. economic recession—just look at freight rail traffic figures from the past six months—and “cyclical industrial fears” have significantly impacted rail equipment equities, creating opportunities for long-term investors with what Cowen and Company analysts Matt Elkott, Jason Seidl (Railway Age Wall Street Contributing Editor) and Adam Kramer describe as “quality companies with self-forged narratives” like Wabtec, Trinity and Greenbrier.
Financial Edge, September 2018: According to the good people at Railinc (a perennial speaker at the annual Rail Equipment Finance Conference, www.railequipmentfinance.com), as of July 1, 2018, 12,581 tank railcars had been retrofit to the DOT117R standard. In the first seven months of 2018, 5,349 tank railcars were retrofit (an average of 764 per month). If retrofits continue at the same pace for the remainder of the year, the total number of retrofit cars completed in 2018 would be more than double the total number of retrofits completed by the end of 2017.
An improving U.S. rail market helped second-quarter earnings at GATX Corp., despite industry-wide railcar oversupply and pressure on car lease rates.
Cowen and Company Equity Research Analyst Matt Elkott, who covers the railway supply sector, on May 4 issued a report that looks favorably upon two potential combinations: Trinity and GATX, and Wabtec and GE Transportation.
Services were held for James D. Martin, 74, president of public relations and advertising agency JDM & Associates Marketing LLC, who died November 27 in Wilmette, Ill.
Following a meeting with GATX CFO and EVP Robert Lyons and Director of Investor Relations Jennifer McManus, Cowen and Company analyst Matt Elkott “came away with reinforced confidence that this is one of the railcar leasing market’s best operators … well-positioned to compete.“
GATX Corporation, in partnership with Amtrak and the Metropolitan Washington Council of Governments, hosted railcar safety training sessions using its TankTrainer™ and Classroom Boxcar at Union Station in Washington, D.C. from April 12-15, 2016.