TD Cowen

Commentary

Railroad Happy Hour a Bit Happier This Time

Leaders in the railroad and logistics market continue to see a challenged intermodal market and holiday peak season. Service has been materially improved on both coasts and the Class Is have plenty of capacity to handle more volume. STB Chairman Oberman announced his departure, a surprise to us and all panelists, leaving the seat open until POTUS names his successor.

“Looking forward, we are confident that the breadth of our products and technologies combined with our ability to maintain resiliency during economic uncertainty will provide us with a solid foundation for growth and continued momentum as we close out this year and move into 2024,” Wabtec President and CEO Rafael Santana said during an Oct. 25 financial presentation.

Wabtec 3Q23: ‘Strong’ Results, Full-Year Guidance Raised

Despite “an increasingly volatile macro-economic environment,” Wabtec delivered a “strong” third quarter, as evidenced by increased growth in sales, margin, earnings and operating cash flow, Wabtec President and CEO Rafael Santana said during an Oct. 25 financial presentation. Sales were up 22.5% from the prior-year quarter, driven by the Freight and Transit segments, which experienced double-digit growth.

GATX 3Q23: ‘Consistent With Initial Outlook’

“Consistent with our initial outlook, the railcar leasing environment in North America remains robust,” GATX President and CEO Robert C. Lyons said during a report on third-quarter 2023 financials, which included Rail North America fleet utilization of 99.3% and a renewal success rate of 83.6%.

(Autorack Photograph Courtesy of Trinity)
Commentary

TD Cowen: 3Q23 Surveys Say …

Railcar demand showed some resilience against a tough macro backdrop, although we view the results of our third-quarter 2023 Rail Equipment Survey as a slight incremental negative for manufacturing and possibly a slight positive for leasing. Our third-quarter 2023 Rail Survey showed that expected rate increases were +3.2%, declining sequentially and sitting below the survey’s long-term average. Business growth expectations remain unchanged, and economic confidence worsened.

Commentary

TD Cowen: Still Searching for Positives in Near-Term

At TD Cowen, we are lowering our rail estimates ahead of third-quarter earnings reports to reflect a very challenged environment. Leaders in the rail and logistics market who attended our latest Railroad Happy Hour” called the current outlook “bleak,” with growing uncertainty in 2025.

Commentary

TD Cowen: Day 1 Transport Conference Takeaways

We hosted freight industry “fireside chats” and presentations on Day 1 of the TD Cowen 16th Annual Global Transportation Conference, being held Sept. 6-7 in Boston. While we heard that the rail

“Looking ahead, we’re building momentum, and the pace of our commercial activity across segments and regions is growing,” Rafael Santana said July 27 during a second-quarter 2023 financial report.

Wabtec: ‘Strong’ 2Q23 Results, Full-Year Guidance Raised

Wabtec “delivered another strong quarter” for the three months ending June 30, 2023, with double-digit earnings per share growth, said President and CEO Rafael Santana, who noted during a July 27 financial report that the “orders pipeline is expected to strengthen” in second-half 2023. The company also raised its full-year 2023 guidance.

TD Cowen: 2Q23 Surveys Say …

Railcar demand showed some resilience against a tough macro backdrop, although we view the results of our Second Quarter 2023 Rail Equipment Survey as a slight incremental negative, similar to our 1Q23

GATX Modifies Lease Price Index Calculation

GATX will report its Lease Price Index (LPI) based on a modified methodology beginning with second-quarter 2023. Weighing in on the move: David Nahass, Railway Age Financial Editor, and Matt Elkott, TD Cowen Transportation OEM Analyst and Vice President Equity Research.

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