Why Greenbrier Companies (GBX) Stock Is Popping Today

NEW YORK (TheStreet) --Shares of Greenbrier Companies Inc. (GBX) are gaining 11.34% to $64.31 in early morning trading on Wednesday after the company reported 2014 third quarter net earnings that increased to $33.6 million, or $1.03 per diluted share, compared to $15.7 million, or 50 cents per diluted share for the year ago period.

Analysts expected the company, which designs, manufacturers, and markets railroad freight car equipment, to post an EPS of 74 cents.

Greenbrier expects to report fourth quarter EPS between $2.98 and $3.08, while the consensus estimate is for EPS between 86 cents and $2.61.

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Separately, TheStreet Ratings team rates GREENBRIER COMPANIES INC as a Buy with a ratings score of B-. TheStreet Ratings Team has this to say about their recommendation:

"We rate GREENBRIER COMPANIES INC (GBX) a BUY. This is driven by several positive factors, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, good cash flow from operations, solid stock price performance and growth in earnings per share. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • The revenue growth came in higher than the industry average of 6.5%. Since the same quarter one year prior, revenues rose by 18.7%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • The debt-to-equity ratio is somewhat low, currently at 0.87, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels.
  • Investors have apparently begun to recognize positive factors similar to those we have mentioned in this report, including earnings growth. This has helped drive up the company's shares by a sharp 145.80% over the past year, a rise that has exceeded that of the S&P 500 Index. Regarding the stock's future course, although almost any stock can fall in a broad market decline, GBX should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
  • Net operating cash flow has increased to $80.28 million or 35.89% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -3.88%.
  • GREENBRIER COMPANIES INC has improved earnings per share by 11.1% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, GREENBRIER COMPANIES INC swung to a loss, reporting -$0.66 versus $1.92 in the prior year. This year, the market expects an improvement in earnings ($2.60 versus -$0.66).
  • You can view the full analysis from the report here: GBX Ratings Report
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