UPDATE: Stifel Nicolaus Initiates FreightCar America with Hold; Valuation Full
Stifel Nicolaus initiated its coverage on FreightCar America (NASDAQ: RAIL) with a Hold rating.
Stifel Nicolaus said, "Our fair value estimate of $24 (or 6.0x our 2014 EPS estimate of $2.00 plus $12/share in cash and equivalents and no debt) provides insufficient upside potential to warrant a Buy rating. Our main concern is that the declines in coal traffic in the 1H12 may lead to weak near-term order activity and medium-term production slowing. Despite our Hold rating, we believe the shares could be considered a longer-term play on the replacement of coal cars in the eastern U.S."
FreightCar America closed at $21.45 on Wednesday.
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