Railcar Manufacturer's Ability to Remain Profitable
1. December 28, 2016
Investment Thesis
While market sentiment towards the railroad industry, and in turn, the railcar manufactur-
ing industry, has turned exceptionally bearish, we believe Greenbrier’s ability to remain
financially healthy during a soft market environment and its efforts to diversify its product
base and geographical revenue stream enable it to emerge from the industry-wide rout
successful and profitable. We see value in GBX stock for these reasons, despite over-
whelming market fear of low crude oil prices decreasing the volume of oil shipments by
rail.
Thesis Highlights
Strong Fundamentals in a Tough Environment
Depressed oil prices have contributed to a steep, industry-wide earnings decline. Green-
brier’s revenue has fallen from 2015 highs which aligned with the peak of US oil produc-
tion. Despite industry woes, GBX has maintained a very strong balance sheet with a net
debt-to-EBITDA ratio of 0.18, approximately $570 million of cash, and a stable credit re-
volver. It has an industry leading ROIC of 22.95%; management is targeting 25.0% for
the second half of FY2016 (note: management compensation is tied to ROIC).
Diversifying Product Base and Revenue Stream
Greenbrier has established a strong backlog that allows it to operate efficiently through
“softer” markets—the backlog sits at 27,500 units ($3.2 billion), 80% of which is non-
energy related. The growing repairs and leasing businesses stabilize cash flows in times of
slower manufacturing. Last quarter, revenue from Leasing & Services totaled $76.6M, up
116% YoY and accounted for 12.2% of total revenue. Joint ventures and strategic acqui-
sitions have expanded operations into new foreign markets such as Saudi Arabia, Brazil,
and Eastern Europe. The international segment currently brings in 14% of revenues but
management is looking to increase this figure to 20% in the near future.
Industry Concerns may be Unjustified and/or Overstated
We believe the markets are currently overreacting to the lower price of oil and the uncer-
tainty around its future. The decline of oil prices has negatively altered the perception of
US oil production, and therefore one of GBX’s main sources of income. While prices have
declined nearly 50% in the last two years, US domestic oil production has only dropped
about 10% from its peak in early 2015 and has stabilized over the last 4 months at
around 8.5 million barrels a day.
Thesis Risks
Product Base Still Dependent on Oil and Not Yet Fully Diversified
Approximately 80% of Greenbrier’s revenue comes from its manufacturing segment, and
40% of segment revenue comes from tankers, which are primarily used for transporting
oil. Over 90% of its revenue comes from within the US. While GBX is working towards
diversifying its revenue stream on both fronts, short-term profits are exposed to an eco-
nomic shock that would affect US manufacturing or US domestic production of oil. While
President-Elect Donald Trump will likely be a tailwind for US manufacturing, the price and
output of oil is still subject to the negotiations of international bureaucrats.
Must Rise above Struggling Industry
The long-term outlook of the rail industry is underwhelming. Greenbrier must outperform
and out-diversify the industry to demand a higher valuation. Greenbrier has distanced
itself from coal transportation, the segment most likely to struggle in the long term, but it
could still suffer alongside other rail companies if pipelines become more prevalent in the
transportation of oil, as pipelines are shown to be safer despite being considered political-
ly toxic.
Analyst Team
Company Information
Price-Based Multiples
Price Target $42.71
Dec-2 Price $40.70
Michael Carola Jack Williamson
Garrett Finn Jon Haugen
Susanna Manziaris
Sector Industrials
Industry Railroad Equipment
Market Cap $1.15 B
Sales (LTM) $2.68 B
Beta 1.6
Recommendation:
Buy
Selected Information
Metric GBX Peers
P/E 12.1x 18.9x
P/B 1.3x 1.1x
EV/Sales 0.7x 1.3xx
EV/EBITDA 4.8x 7.1x
Metric GBX Peers
ROIC 22.95% 10.38%
Div. Yield 2.06% 3.03%
EBITDA Margin 17.0% 26.85%
Net Debt/
EBITDA
0.17 1.64
2. December 28, 2016
Business Overview1
Railcar and Marine Vessel Manufacturing
Intermodal Railcars, the most important being the double-stock railcar, which are de-
signed to transport containers stacked two-high on a single platform.
A variety of tank cars, including both general and certain pressurized tank cars, which are
designed for the transportation of products such as crude oil, ethanol, liquefied petroleum
gas, caustic soda, urea ammonium nitrate, vegetable oils, bio-diesel and various other
products.
Full line of railcar equipment designed for the transportation of automotive products.
Conventional railcars, such as boxcars, which are used in the transport of forest products,
perishables, general merchandise and commodities. Covered hopper cars, which are used
for the grain, fertilizer, sand, cement and petrochemical industries as well as gondolas for
the steel, metals and aggregate markets. Flat car products include center partition cars
for the forest products industry, bulkhead flat cars and solid waste service flat cars.
Marine Vessels—Greenbrier manufactures a broad range of Jones Act1
ocean-going and
river barges for transporting merchandise between ports within the U.S. including conven-
tional deck barges, double-hull tank barges, railcar/deck barges, barges for aggregates
and other heavy industrial products and dump barges.
Ten (10) Wheels and Parts shops provide complete wheel servicing including recondition-
ing of wheels and axles in addition to new axle machining and finishing and axle downsiz-
ing. Component parts facilities recondition and manufacture railcar cushioning units, cou-
plers, yokes, side frames, bolsters and various other parts. Facilities also produce roofs,
doors and associated parts for boxcars
Leasing and Services
Greenbrier’s relationships with financial institutions, combined with our ownership of a
lease fleet of approximately 8,900 railcars enables it to offer operating leases and “by the
mile” leases to customers. The company frequently originates leases of railcars, which are
either newly built or refurbished by Greenbrier, or bought from the secondary market and
subsequently sold with attached leases to financial institutions. Greenbrier then provides
such institutions with management services under multi-year agreements. Assets from the
lease fleet are periodically sold to take advantage of market conditions, manage risk and
maintain liquidity.
The management services business offers a broad array of software and services that
include railcar maintenance management, railcar accounting services (such as billing and
revenue collection, car hire receivable and payable administration), total fleet manage-
ment (including railcar tracking using proprietary software), administration and railcar
remarketing. The company currently owns or provides management services for a fleet of
approximately 273,000 railcars for railroads, shippers, carriers, institutional investors and
other leasing and transportation companies in North America.
1
Freight Manufacturing 77.70%
Leasing & Services 12.60%
Other 9.70%
Revenue Segmentation
Backlog Highlights
Total manufacturing
backlog
27,500
units
Estimated future reve-
nue (millions) $3,200
Units scheduled for de-
livery in 2017 12,000
Marine backlog
(millions) $114
Covered hopper cars for
use in energy related
sand transportation 3,800 units
3. December 28, 2016
Industry Overview
Rail Manufacturing
The Rail Manufacturing industry manufactures equipment used pri-
marily in the transportation and freight segments. The aggregate
industry is segmented into two main groups, Equipment Manufac-
turing and Servicing. Equipment manufacturing is segmented into
four primary offerings: railcars, tankers, flatbeds, and marine barg-
es. These various equipment offerings are designed to ensure com-
panies are able to transport their goods regardless of being liquid,
or solid across the country, or globe.
Servicing is broken up into three categories, which includes after-
market refurbishment & repairs, management consulting, and leas-
ing.
Industry Valuation
The total industry market capitalization is $14.25 billion, with LTM
revenue totaling $14.04 billion. The average P/E multiple is 18.9x
and EV/EBITDA 7.1x.
From 2011 until 2014 GBX has remained relatively aligned to the
industry EV/EBITDA. Although, in mid-2014 GBX ‘s EV/EBITDA mul-
tiple fell below the industry average. The gap has since widened
over the last two years; this could be indicative of GBX’s relative
value.
Total Market Cap $14.25 B
TTM Revenue $14.04B
Relevant Industry Metrics
Industry Valuation
Metric GBX Peers
P/E 12.1x 18.9x
P/B 1.3x 1.1x
EV/Sales 0.7x 1.3xx
EV/EBITDA 4.8x 7.1x
4. December 28, 2016
Industry Overview (cont.)
Competitors
Greenbrier’s main competitors are Trinity Industries (TRN), American
Railcar Industries (ARII), and FreightCar America (RAIL). Trinity In-
dustries is the largest player in the industry, with a market capitaliza-
tion of $3.27B. Furthermore, TRN has the most diversified business
model along with industry leading margins.
American Railcar Industries (ARII) has a market capitalization of
$704M. Unlike GBX and TRN, ARII does not have a well-diversified
revenue stream, and as a result is more exposed and correlated to
the tanker and car market. ARII also offers a very limited offering of
intermodal transport, which increases cost associated with inefficien-
cy, and also increases the chances of damage to the products that
are being transported.
FreightCar America (RAIL) has the smallest market capitalization in
the industry. FreightCar America focuses on manufacturing aluminum
and steel bodied freight rail cars. The company also manufactures
parts and refurbishes railcars. FreightCar America’s primary custom-
ers are leasing companies and railroads.
Industry Returns
The graph below compares GBX’s 5-YR Returns (%) to the entire Rail
Manufacturing industry. Between the end of 2011 and the beginning
of 2013 GBX’s returns were below the industry average. In 2013
when oil hit $91.17/ barrel GBX and the industry achieved over 200%
returns. Despite the record high returns, when oil dropped in price
throughout 2014 until present (2016), revenues fell dramatically.
From the graph it can be inferred that Greenbrier and the industry
clearly have a positive correlation to the price of oil.
Competitor Highlights
Trinity Industries (TRN)
Biggest player in the industry
Most diversified business model
Industry leading margins
American Railcar Industries
(ARII)
Relatively more exposure and
correlation to the tanker car
market
Limited intermodal offerings
FreightCar America (RAIL)
All manufacturing
Similar manufactured product
offerings
-50%
0%
50%
100%
150%
200%
250%
300%
GBX 5Y Returns vs. Industry
Sources:
Company 10K
Earnings call
5. December 28, 2016
Management Overview
Chief Executive Officer, William Furman
William A. Furman is Chief Executive Officer and Chairman of the
Board of the Greenbrier. Mr. Furman has served Chief Executive Of-
ficer of the company since 1994, and as Chairman of the Board of
Directors of the company since January 2014. Mr. Furman was Vice
President of the Greenbrier from 1974 to 1994, and he currently
serves as a director of Schnitzer Steel Industries, Inc., a steel recy-
cling and manufacturing company1
.
Management compensation incentives tied to ROIC
Prior to 2014, Greenbrier’s Compensation Committee established per-
formance goals related to adjusted Corporate EBITDA for the purpos-
es of the company’s short-term cash incentive program for executive
officers. Beginning in FY 2014, the Committee adopted Corporate Re-
turn on Invested Capital (ROIC) as an additional financial perfor-
mance measure to determine executive compensation because ROIC
is more closely aligned with shareholder interests2
. ROIC has more
than doubled since the implementation of the plan, resulting in en-
hanced shareholder returns.
William A. Furman $3,025,095
Lorie L. Tekorius $851,545
Mark J. Rittenbaum $1,252,031
Alejandro Centurion $1,483,440
Victoria McManus $988,007
James T. Sharp $433,717
FY 2016 NEO Compensation
-5%
0%
5%
10%
15%
20%
25%
30%
$0
$10
$20
$30
$40
$50
$60
$70
$80
8/31/2006 8/31/2007 8/31/2008 8/31/2009 8/31/2010 8/31/2011 8/31/2012 8/31/2013 8/31/2014 8/31/2015
10YReturns vs. ROIC
Insiders’ Last Transaction
William A. Furman3
-20,450 shares
Lorie L. Tekorius -1,361 shares
Mark J. Rittenbaum -6,250 shares
Alejandro Centurion3
-3,162 shares
Victoria McManus3
-2,383 shares
James T. Sharp -2,996 shares
6. December 28, 2016
Strong Fundamentals in a Tough Environment
The decline of US oil has spared few
US oil production peaked in 2015, and since then, companies with
close ties to oil have seen steep declines in their stock prices. Green-
brier is no stranger to this phenomena; its stock price is down over
50% since September 2014. From 25% and 18% growth in 2014 and
2015, respectively, Greenbrier’s revenue growth grinded to an abrupt
halt in FY 2016, expanding just 2.85% YoY. Analysts expect revenue
to decline by over 20% over the next two years.
Healthy balance sheet will help weather the storm
Greenbrier’s management has kept net-debt levels fairly low at just
18% of LTM EBITDA, well below the industry average. The company
holds approximately $570 million in cash with a stable credit revolver
which allows Greenbrier to be extremely flexible during “softer” mar-
kets like the one the company currently finds itself in. Since Greenbri-
er’s board had implemented an executive compensation structure
tied to Return on Invested Capital, the company has generated an
ROIC of 23%, and management plans to keep this high level of re-
turn stable over the next year by strategically managing costs.
Historical Valuation
Despite the steep fall in Greenbrier’s stock price, the company
maintains its financial health. Management’s conservative use
of debt and its ability to squeeze out high returns out of every
dollar of invested capital have kept the company afloat during
this tough market environment. The overselling of GBX stock
had depressed its EV/EBITDA multiple to a 5-year low by the
end of 2015. Recently, the stock has picked up momentum, but
still trades below it’s 5-year multiple average.
Fundamental Data
Price-Based Multiples
Metric GBX Peers
P/E 12.1x 18.9x
P/B 1.3x 1.1x
EV/Sales 0.7x 1.3xx
EV/EBITDA 4.8x 7.1x
Metric GBX Peers
ROIC 22.95% 10.38%
Div. Yield 2.06% 3.03%
EBITDA Margin 17.0% 26.85%
Net Debt/
EBITDA
0.17 1.64
EBITDA/Interest
Exp.
— 7.19
FCF Yield 19.5% 9.5%
Asset Turnover 1.48 0.58
7. December 28, 2016
Diversifying Product Base and Revenue Stream
Expanding Product Base
GBX has been focusing on growing its intermodal railcar manufacturing seg-
ment. Intermodal units are specifically designed to be moved from railcars,
to trucks, and to large barges. This ensures a more efficient and secure
delivery of a wide range of products due to the ease of transporting the
intermodal unit. Greenbrier’s offering of intermodal railcars has significantly
expanded the company’s product base.
Geographical Diversification
The international rail manufacturing industry had a total revenue of
$14.04B. Domestic countries account for 95% of revenue, while interna-
tional companies only made up 5% of revenue. Greenbrier has the most
internationally diverse revenue stream amongst competitors, with the Unit-
ed States market comprising of 86% of total revenues, and international
businesses totaling 14% of revenues. Greenbrier has been utilizing its buy-
ing power to expand into emerging railcar markets in Europe, Brazil, and
Saudi Arabia. The Europe manufacturing facility uses advanced fabrication
technologies to provide a vast array of high quality railcars to a diverse set
of clients. The manufactured railcars cross a variety of different purposes
ranging from car wagons, all the way to tank wagons. In 2015, Greenbrier
agreed to purchase a 19.5% stake in Brazilian Rail manufacturer Amsted–
Maxion Hortolandia (AMH) for $15 million. The deal also allows Greenbrier
to purchase another 40% before September 2017. AMH controls an annual
70% market share of the South American railroad freight car market. This
could mean significant future growth for Greenbrier in the South American
market.
Leasing stabilizes cash flows
The leasing segment has become a favored revenue segment for rail manu-
facturers. The market typically assigns a higher multiple to companies that
earn a significant portion of their revenue from leasing because companies
that diversify their revenue stream through a leasing segment help manage
cyclical risk.
GBX ARII TRN RAIL
Freight
Manu-
facturing
77.70% 78.70% 84.80% 99.70%
Leasing
& Ser-
vices
12.60% 21.30% 13.80% 0.30%
Other 9.70% 0 1.40% 0
Revenue Segmentation
8. December 28, 2016
Industry Concerns May be Unjustified and/or Overstated
Oil Rigs Online
The US oil rig count has increased in the weeks leading up to the Nov. 30 OPEC meeting. Despite the lower US oil
prices, the industry has remained resilient. Extensive financing has been performed for operations in the Permian Ba-
sin, which is one of the more efficient basins for operations. The Permian rig count is currently up approximately 70%
since the end of April. The more shale basins such as Eagle Ford and Williston have not seen this level of increase,
but this still shows a sign of improvement in US oil production. This growth is likely to continue given the optimistic
agreement from the recent OPEC meeting.
Over-Reaction to Declining Oil Prices
The stock price of GBX has been significantly affected by the price of oil in recent years. The stock has lost much of
its gains from before the US oil production boom. The drop in US oil production due to the declining oil prices has
negatively affected the perception of the US railcar industry given the recent rise in the need for crude by rail trans-
portation. However, while prices have declined approximately 50% in the last two years, US oil production has only
dropped around 10% from its peak in early 2015 and has stabilized at current levels. The market also seems to be
pricing in a severe decrease in the railcar orders market. While we a decline is likely, we believe that the market
seems to be already pricing this drop in and is missing any potential upside.
Continuing Demand for Crude by Rail
Many of the more efficient oil rigs that are successful in a low price environment like we are in today utilize pipelines.
However, there will always be a need for crude by rail. Pipelines do decrease costs, but the political fallout can be
endless as we are currently seeing from the DAPL situation and have seen from the axing of the Keystone Pipeline.
Crude by Rail will be heavily relied for crude transportation from the Midwest to the gulf and transports to each coast.
Regulation
A new rule has been put in place that requires the retirement of DOT-111 tanker cars by 2017-2018. As of 2013, DOT
-111 tanker cars made up about 69% of the American tanker car fleet and about 80% of the Canadian tanker car
fleet. This is due to the high profile disasters that can follow any crude by rail accident considering the flammable
contents and the speed at which they travel. Greenbrier is set up well for this move, as its DOT-117 car was dubbed
“The Tank Car of the Future”. The Canadian transport minister has pushed the retirement deadline of DOT-111 cars
up 6 months due to the country’s reliance of crude by rail because of the nixing of the Keystone pipeline. Despite
these regulations Greenbrier has yet to see many orders come to fruition most likely due to the struggling operations
of oil producers. It seems that many of Greenbrier’s customers are merely kicking the can down the road since declin-
ing oil production has seen a decrease in tanker car orders.
9. December 28, 2016
Product Base Still Dependent on Oil and Not Yet Fully Diversified
Connection to Oil
The shale revolution and increase in US oil production brought upon unprecedented railcar orders for
Greenbrier in correlation with the crude by rail phenomenon. Railroads needed tanker cars and sand cars
in order to meet the rising production at many of the oil fields in the US. However, prolonged low crude
oil prices have forced many of the less efficient production operations to shut down. This is not a good
thing for Greenbrier as many of the more efficient oil rigs and basins utilize pipelines to transport oil.
Lacking Revenue Diversification
Currently, 80% of Greenbrier’s revenue comes from its manufacturing segment and 40% of this segment
revenue comes from tankers. Greenbrier does not break out what percentage of the tankers are crude
tanker cars, but it can be assumed that it has been a sizable portion in recent years. Also, the company
currently has 80%-90% of its revenue coming from the US meaning that it is very susceptible to any
economic shock that could worsen the decline of US oil production or US manufacturing.
Order Cancellations
During the last earnings call, Greenbrier announced the settlement on the order cancellation of 1,200
sand cars. This is worrisome because it points to the struggle of current fracking operations due to its
reliance on sand transports. Greenbrier states that they do not allow order cancellations, but say that
they work with their customers to find fitting accommodations during tough environments like we are
seeing today. This brings concern to how much can Greenbrier rely on its backlog, which is marketed as
very strong.
11. December 28, 2016
Must Rise above the Struggling Industry
▪ Expanded market share increases risk
Railcar manufacturing as an industry has stagnated after the boom in 2014-
2015 and will likely decline in the near future. Greenbrier is expecting this
but is not immune to industry wide concerns. In order for Greenbrier to be a
value pick, it must excel within the industry. In recent years, Greenbrier has
done just so, increasing its backlog market share from 13% to 30% and
maintaining a positive net income where its competitors have failed. This
increased market share does mean that Greenbrier is more susceptible to
industry wide risk and limits its ability to function as a niche supplier and
avoid macro issues. This is partially mitigated by Greenbrier’s new tankers
being some of the best for conforming to DOT 117 specification regulations,
as a decrease in demand will have less of an affect on Greenbrier. Tankers
in general are the second most common type of car behind covered hoppers
and make up 21% of all railcars currently being operated.
▪ Dependent on backlog staying healthy
A large part of Greenbrier’s potential upside comes from the fact that they
have a very strong backlog in tough market environment. This backlog cur-
rently sits at over 27,500 units valued at over $3.2 billion. If this backlog
were to shrink via canceled orders, Greenbrier would lose a significant
amount of future revenue and would lose one of its distinct advantages over
its competitors from an investor’s perspective. A significant loss of backlog is
unlikely as has never happened to Greenbrier to date, but it is possible if the
rail transportation industry severely underperforms or if Greenbrier’s reputa-
tion among its customers were to worsen for any reason. The primary con-
cern is that much of their future earnings are dependent on orders in the
future that can be canceled, although it is much more likely for orders to be
delayed rather than canceled.
▪ Not outperforming means possible heavy downside
There is a larger inherent risk when investing in a company within a strug-
gling, volatile industry. We believe Greenbrier has qualities that allow it to
be a value pick despite industry woes, but nevertheless, the company must
significantly outperform the competition in order for us to see real upside. If
it simply performs or even underperforms then the losses will likely be high-
er for Greenbrier than they would be for an investment in a similar relative
position within a different industry.
12. December 28, 2016
Valuation—Perpetuity Growth Method
Revenue Growth
Our conservative discounted cash flow model forecasts negative rev-
enue growth over the next four years. Analysts expect revenues to
decline nearly 20% YoY in 2017 and 2018. Based on Greenbrier’s
healthy backlog that management believes is stronger than it was
during the last “soft” market environment eight years ago, we expect
revenues to bottom out at $1.3bn in FY 2020. We do not foresee
much difficulty in Greenbrier’s ability to beat the extremely low ana-
lyst and market forecasts. Transportation by rail has been and will
continue to be a mainstay of American infrastructure, and so we be-
lieve growth will eventually normalize. President-Elect Donald
Trump’s effect on the industry’s growth is unclear. Investment in do-
mestic infrastructure should be a tailwind to manufacturers, but the
Republican controlled Congress may prove to be friendly to oil pipe-
lines, an obvious risk to railroad companies for the reasons we previ-
ously outlined.
Terminal Value
Our Terminal Value calculation considers Greenbrier’s excess returns
and it’s industry-leading return on invested capital using the formula
below:
Our selected perpetuity growth rate of 1.6% is intended to reflect the
growth rate at a normalized point in the business cycle, which we
estimate to be around the rate of inflation. Again, this conservative
number should not be difficult to beat.
Discount Rate
Greenbrier’s forecasted cash flows and terminal value are discounted
at 11%, it’s weighted average cost of capital according to Bloomberg.
Valuation
Our DCF model returned a value of $42.71 per share of GBX stock.
Discount Rate 11.03%
5Y Revenue CAGR -7.65%
5Y Avg. EBITDA Margin 11.97%
Perpetuity Growth Rate 1.6%
Reinvestment Rate 6%
Key Assumptions
Summary
Enterprise Value 1,612 M
Less: Non-Equity In-
terests (224 M)
Equity Value 1,388M
Equity Value Per
Share $42.71
Current Price $40.70
Upside/(Downside) 5%
Comparable Companies
Company
Forward EV/
EBITDA
Forward
P/E
Greenbrier 7.7x 21.8x
Trinity 7.4x 22.8x
American
Railcar 7.4x 14.0x
FreightCar 9.4x 61.7x
Average 8.0x 28.9x
GBX Implied
Share Price $58.37 $45.50
Upside/
(Downside) 43.92% 11.79%
13. December 28, 2016
Value Risks to the Downside
Revenue
Oil prices stay lower for longer and fewer drillers are produc-
ing oil
As oil rigs come back online, the time between discovery and
oil in the barrel takes longer than anticipated
A potentially friendly stance towards oil pipelines by the
Trump administration
Oil pipelines continue to capture market share from rail trans-
portation
An interest rate hike, and in turn a stronger US dollar, puts
downward pressure on oil prices
Inflationary concerns, sparked by the election of Donald
Trump, materialize, resulting in higher oil prices to the point
where producers have trouble remaining competitive
Costs
Unfulfilled backlog orders can result in potentially large inven-
tory write-downs.
A stronger US dollar dampens the advantages of sourcing rev-
enue from oversees, creating foreign exchange losses
Terminal Value
The terminal value used in our DCF makes up 60% of our val-
uation
Management could have difficulty in reaching their 25% ROIC
target
Our selected perpetuity growth rate (1.6%) is a highly subjec-
tive figure
Higher than anticipated revenue declines will negatively im-
pact terminal year cash flow and therefore terminal value
Discount Rate 11.03%
5Y Revenue CAGR -7.65%
5Y Avg. EBITDA Margin 11.97%
Perpetuity Growth Rate 1.6%
Reinvestment Rate 6%
Key Assumptions
Summary
Comparable Companies
Company
Forward EV/
EBITDA
Forward
P/E
Greenbrier 7.7x 21.8x
Trinity 7.4x 22.8x
American
Railcar 7.4x 14.0x
FreightCar 9.4x 61.7x
Average 8.0x 28.9x
GBX Implied
Share Price $58.37 $45.50
Upside/
(Downside) 43.92% 11.79%
Enterprise Value 1,612 M
Less: Non-Equity In-
terests (224 M)
Equity Value 1,388M
Equity Value Per
Share $42.71
Current Price $40.70
Upside/(Downside) 5%
