Triton International Limited is currently mired in multiple headwinds, which we believe, have made it an unimpressive investment option.
Let’s delve deeper.
Southward Earnings Estimate Revisions: The Zacks Consensus Estimate for earnings for the current year has been revised 7.1% downward, over the past 60 days. The unfavorable estimate revisions indicate brokers’ lack of confidence in the stock.
An Underperformer: Triton stock has declined 6.8% in a year’s time compared with its industry’s 3.6% fall.
Weak Zacks Rank: Triton currently carries a Zacks Rank #4 (Sell). Our research shows that stocks with a Zacks Rank #4 or #5 (Strong Sell) does not offer attractive investment opportunities.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Bearish Industry Rank: The industry to which TRTN belongs, currently has a Zacks Industry Rank of 195 (of 250 plus groups). Such an unfavorable rank places TRTN in the bottom 22% of the Zacks industries.
Studies show that 50% of a stock price movement is directly related to the performance of the industry group it belongs to. A mediocre stock within a strong group is likely to outclass a robust stock in a weak industry. Therefore, reckoning the industry’s performance becomes imperative.
Other Headwinds: Triton International's bottom-line growth is being limited by high administrative expenses. The increase was a substantial 10.9% year over year in 2021. Administrative expenses increased in 2022 as well, leading to a 3.7% uptick in operating costs.
In the event of operating expenses continuing to rise in the coming quarters, the bottom-line growth is likely to be severely hampered, which in turn might hurt the stock.
TRTN’s total debt-to-equity ratio is very high. The ratio exceeds 100 (in percentage terms). A high ratio indicates that the company is heavily reliant on debt to finance its growth.
Stocks to Consider
Some better-ranked stocks in the Zacks Transportation sector are Copa Holdings (CPA - Free Report) and GATX Corporation (GATX).
Copa Holdings currently sports a Zacks Rank #1. CPA's focus on its cargo segment is very encouraging. In fourth-quarter 2022, cargo and mail revenues jumped 69% to $27.09 million, owing to higher cargo volumes and yields.
For first-quarter and full-year 2023, CPA’s earnings are expected to register 302.9% and 40.6% growth, respectively, on a year-over-year basis.
GATX Corporation carries a Zacks Rank #2 (Buy) at present. The gradual improvement in the North American railcar leasing market is a huge positive for GATX. Management expects recovery in the North American railcar leasing market to continue in 2023.
For full-year 2023, GATX’s earnings are expected to register 10.5% growth on a year-over-year basis.
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Triton International Limited is currently mired in multiple headwinds, which we believe, have made it an unimpressive investment option.
Let’s delve deeper.
Southward Earnings Estimate Revisions: The Zacks Consensus Estimate for earnings for the current year has been revised 7.1% downward, over the past 60 days. The unfavorable estimate revisions indicate brokers’ lack of confidence in the stock.
An Underperformer: Triton stock has declined 6.8% in a year’s time compared with its industry’s 3.6% fall.
Weak Zacks Rank: Triton currently carries a Zacks Rank #4 (Sell). Our research shows that stocks with a Zacks Rank #4 or #5 (Strong Sell) does not offer attractive investment opportunities.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Bearish Industry Rank: The industry to which TRTN belongs, currently has a Zacks Industry Rank of 195 (of 250 plus groups). Such an unfavorable rank places TRTN in the bottom 22% of the Zacks industries.
Studies show that 50% of a stock price movement is directly related to the performance of the industry group it belongs to. A mediocre stock within a strong group is likely to outclass a robust stock in a weak industry. Therefore, reckoning the industry’s performance becomes imperative.
Other Headwinds: Triton International's bottom-line growth is being limited by high administrative expenses. The increase was a substantial 10.9% year over year in 2021. Administrative expenses increased in 2022 as well, leading to a 3.7% uptick in operating costs.
In the event of operating expenses continuing to rise in the coming quarters, the bottom-line growth is likely to be severely hampered, which in turn might hurt the stock.
TRTN’s total debt-to-equity ratio is very high. The ratio exceeds 100 (in percentage terms). A high ratio indicates that the company is heavily reliant on debt to finance its growth.
Stocks to Consider
Some better-ranked stocks in the Zacks Transportation sector are Copa Holdings (CPA - Free Report) and GATX Corporation (GATX).
Copa Holdings currently sports a Zacks Rank #1. CPA's focus on its cargo segment is very encouraging. In fourth-quarter 2022, cargo and mail revenues jumped 69% to $27.09 million, owing to higher cargo volumes and yields.
For first-quarter and full-year 2023, CPA’s earnings are expected to register 302.9% and 40.6% growth, respectively, on a year-over-year basis.
GATX Corporation carries a Zacks Rank #2 (Buy) at present. The gradual improvement in the North American railcar leasing market is a huge positive for GATX. Management expects recovery in the North American railcar leasing market to continue in 2023.
For full-year 2023, GATX’s earnings are expected to register 10.5% growth on a year-over-year basis.
Infrastructure Stock Boom to Sweep America
A massive push to rebuild the crumbling U.S. infrastructure will soon be underway. It’s bipartisan, urgent, and inevitable. Trillions will be spent. Fortunes will be made.
The only question is “Will you get into the right stocks early when their growth potential is greatest?”
Zacks has released a Special Report to help you do just that, and today it’s free. Discover 5 special companies that look to gain the most from construction and repair to roads, bridges, and buildings, plus cargo hauling and energy transformation on an almost unimaginable scale.
Download FREE: How To Profit From Trillions On Spending For Infrastructure >>
Get the latest research report on CPA - FREE
Get the latest research report on GATX - FREE