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Here's Why Investors Should Avoid Trinity (TRN) Stock Now
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Trinity Industries, Inc. (TRN - Free Report) 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 first-quarter 2024 earnings has been revised 25.7% downward over the past 90 days. For 2024, the consensus mark for earnings has moved 23.5% south in the same time frame. The unfavorable estimate revisions indicate brokers’ lack of confidence in the stock.
Weak Zacks Rank: Trinity currently carries a Zacks Rank #5 (Strong Sell).
Unimpressive Price Performance: Trinity has gained 9.7% over the past six months, underperforming its industry’s 27.3% gain.
Image Source: Zacks Investment Research
Negative Earnings Surprise History: Trinity has a disappointing earnings surprise history. The company's earnings lagged the Zacks Consensus Estimate in three of the past four quarters (surpassed the mark in the remaining quarter), delivering an average miss of 27.48%.
Other Headwinds: Trinity’s liquidity position is concerning. The company exited the fourth quarter of 2023 with cash and cash equivalents of $105.7 million, lower than the total debt of $5,754.2 million. This implies that it does not have enough cash to meet its debt obligations.
Higher net interest expense is likely to mar Trinity’s bottom line. The company continues to incur higher interest expenses owing to higher interest rates and higher overall average debt. Net interest expense for the full year 2023 increased 27.9% year over year due to higher interest rates and higher overall average debt during 2023.
GATX has an encouraging track record with respect to earnings surprise, having surpassed the Zacks Consensus Estimate in three of the last four quarters (missing the mark in the remaining one). The average beat is 16.47%.
The Zacks Consensus Estimate for 2024 earnings has been revised 8.9% upward over the past 90 days. GATX has an expected earnings growth rate of 6.51% for 2024. Shares of GATX have gained 26% in the past year.
SkyWest's fleet-modernization efforts are commendable. The Zacks Consensus Estimate for SKYW’s 2024 earnings has improved 27.3% over the past 90 days. Shares of SKYW have surged 242.3% in the past year.
SKYW has an expected earnings growth rate of more than 100% for 2024. It delivered a trailing four-quarter earnings surprise of 128.02%, on average.
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Here's Why Investors Should Avoid Trinity (TRN) Stock Now
Trinity Industries, Inc. (TRN - Free Report) 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 first-quarter 2024 earnings has been revised 25.7% downward over the past 90 days. For 2024, the consensus mark for earnings has moved 23.5% south in the same time frame. The unfavorable estimate revisions indicate brokers’ lack of confidence in the stock.
Weak Zacks Rank: Trinity currently carries a Zacks Rank #5 (Strong Sell).
Unimpressive Price Performance: Trinity has gained 9.7% over the past six months, underperforming its industry’s 27.3% gain.
Image Source: Zacks Investment Research
Negative Earnings Surprise History: Trinity has a disappointing earnings surprise history. The company's earnings lagged the Zacks Consensus Estimate in three of the past four quarters (surpassed the mark in the remaining quarter), delivering an average miss of 27.48%.
Other Headwinds: Trinity’s liquidity position is concerning. The company exited the fourth quarter of 2023 with cash and cash equivalents of $105.7 million, lower than the total debt of $5,754.2 million. This implies that it does not have enough cash to meet its debt obligations.
Higher net interest expense is likely to mar Trinity’s bottom line. The company continues to incur higher interest expenses owing to higher interest rates and higher overall average debt. Net interest expense for the full year 2023 increased 27.9% year over year due to higher interest rates and higher overall average debt during 2023.
Stocks to Consider
Some better-ranked stocks from the Zacks Transportation sector are GATX Corporation (GATX - Free Report) and SkyWest, Inc. (SKYW - Free Report) . Each stock presently carries a Zacks Rank of 2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
GATX has an encouraging track record with respect to earnings surprise, having surpassed the Zacks Consensus Estimate in three of the last four quarters (missing the mark in the remaining one). The average beat is 16.47%.
The Zacks Consensus Estimate for 2024 earnings has been revised 8.9% upward over the past 90 days. GATX has an expected earnings growth rate of 6.51% for 2024. Shares of GATX have gained 26% in the past year.
SkyWest's fleet-modernization efforts are commendable. The Zacks Consensus Estimate for SKYW’s 2024 earnings has improved 27.3% over the past 90 days. Shares of SKYW have surged 242.3% in the past year.
SKYW has an expected earnings growth rate of more than 100% for 2024. It delivered a trailing four-quarter earnings surprise of 128.02%, on average.