Back to top

Image: Bigstock

Strong Liquidity Aids GATX Corp (GATX) Amid Low Lease Revenues

Read MoreHide Full Article

We have recently updated a report on GATX Corporation (GATX - Free Report) .

We are positive about GATX's buyout of the world’s fourth-largest tank container lessor company — Trifleet Leasing Holding — in December 2020. Through the purchase, GATX strengthened its railcar leasing operations. The buyout of the Dutch company, worth approximately €175 million, has further widened its customer base across the globe.

GATX's sound liquidity position is encouraging. At the end of first-quarter 2021, the company’s cash and cash equivalents stood at $959 million, higher than its short-term borrowings of $19.6 million. This implies that the company has sufficient cash to meet short-term debt obligations.

However, GATX’s first-quarter results were affected by low profitability recorded in the Portfolio Management unit. Segmental profit fell 68.7% to $6.1 million on a year-over-year basis. The downside was primarily due to lower lease revenues and lower remarketing income at the Rolls-Royce and Partners Finance affiliates.

In the first quarter of 2021, profits in the Rail North America segment declined by 8.8% to $65.7 million on a year-over-year basis. The downside was primarily due to lower lease revenues.

Zacks Rank & Stocks to Consider

GATX currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the broader Zacks Transportation sector include Landstar System, Inc. (LSTR - Free Report) , Triton International Limited and Herc Holdings Inc. (HRI - Free Report) . Landstar and Herc Holdings sport a Zacks Rank #1 (Strong Buy), while Triton carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Long-term (three to five years) expected earnings per share growth rate for Landstar, Triton and Herc Holdings is projected at 12%, 10% and 42.9%, respectively.

Zacks Top 10 Stocks for 2021

In addition to the stocks discussed above, would you like to know about our 10 best buy-and-hold tickers for the entirety of 2021?

Last year's 2020 Zacks Top 10 Stocks portfolio returned gains as high as +386.8%. Now a brand-new portfolio has been handpicked from over 4,000 companies covered by the Zacks Rank. Don’t miss your chance to get in on these long-term buys.

Access Zacks Top 10 Stocks for 2021 today >>


Unique Zacks Analysis of Your Chosen Ticker


Pick one free report - opportunity may be withdrawn at any time


Landstar System, Inc. (LSTR) - $25 value - yours FREE >>

GATX Corporation (GATX) - $25 value - yours FREE >>

Herc Holdings Inc. (HRI) - $25 value - yours FREE >>

Published in