UPDATE: D.A. Davidson & Co. Reiterates Buy Rating, Raises PT on The Greenbrier Companies as Q3 Margins are Well Above Expectations

In a report published Thursday, D.A. Davidson & Co. analyst JB Groh reiterated a Buy rating on The Greenbrier Companies GBX, and raised the price target from $65.00 to $75.00. In the report, D.A. Davidson & Co. noted, “Greenbrier reported FQ3 EPS of $1.03, well above our estimate of $0.70. The tax rate was lower than we had modeled (26.3% vs. 34% expected) due to higher JV income. Revenues of $593 million beat our estimate of $551 million. Gross margin of 16.3% (+478bp year-over-year) was driven by product mix and higher production rates in lower cost facilities (Mexico). The company delivered 4,300 units vs. 3,900 in our model. Management expressed confidence in the sustainability of margins with further, non-liner improvements expected.” The Greenbrier Companies closed on Wednesday at $64.61.