Manufacturer of railway freight cars and equipment Greenbrier Company (NYSE: GBX) The stock made a sharp nose dive in March 2022, ahead of the 2022 strong financial report. The company is successfully navigating supply chain disruptions and inflationary pressures on products resulting in higher raw material costs and rising logistical costs. The Russian conflict in Ukraine is expected to have far-reaching consequences due to inflation in commodities, including grain, crude oil and fertilizers. They are also among the top suppliers of iron ore and finished steel in Europe. However, strong demand, strong liquidity, and evolving leasing operations are offset headwind as Greenbrier continues to have market share. It is noteworthy that U.S. freight rail routes, including diesel and electric power generation, are 3X to 4X more fuel-efficient than trucks. In fact, one ton of freight per gallon of fuel can be moved about 500 miles with a 75% reduction in greenhouse gas emissions. It relieves traffic jams and wear on highways. One of the reasons Greenbrier’s second-half story of the year is that its pricing actions in Q1 are fruitful. Wise investors looking for exposure to a leader in the rail car industry in bargaining can look to scale to the position of opportunistic pullback.
Q2 Financial 2022 Earnings Release
On April 6, 2022, Greenbrier released the results for the second quarter of its fiscal year ending February 2022, 2022. The company reported আয় 0.38 earnings per share (EPS) profit for $ 0.19, excluding non-recurring item vs. consensus analyst estimates, beating 0.19. Revenue rose 131% year-on-year (YoY) to $ 682.8 million, according to the consensus analyst estimate of $ 575.76 million. Orders for the new railcar were 8,500 units valued at 930 million. Fleet lease usage for the quarter was 98%. The company has distributed 4,800 units resulting in a 1.8 book-to-bill ratio. As of February 18, 2022, the diversified new railcar backlog was 32,100 units valued at 3.6 million. The company expects to supply about 17,500 units to 19,000 units for the full fiscal year 2022. Greenbrier CEO Lori Tecorius commented,
Conference Call Takeaways
CEO Tekorius took over as CEO on March 1, 2022 Former CEO Bill Furman has been transferred to the position of executive chairman “The current war in Europe has put a direct strain on the availability and cost of products ranging from minerals to food to fertilizer to crude oil, as well as coal and natural gas,” said Furman. Commodity markets have traditionally been a major indicator of the expansion of rail freight. Most commodities shipped by rail due to sanctions on Russia or reduced production in Russia and Ukraine are facing upward price pressures due to limited demand. And demand for trains will increase in Brazil and elsewhere in the world. “
CEO Tecorius noted that the company is still feeling the effects of the epidemic, including missing about 12% of its workforce due to virus compression. Supply chains and labor pressures allow direct production margins to fall below expectations. However, they have been able to avoid any off-line material availability. This is all temporary because operating momentum tends to improve with higher pricing and optimized overhead exploitation on increased production. The Russian-Ukrainian conflict is directly affecting the cost of materials and they are among the largest suppliers of iron ore, and finished steel. The cost of higher materials arising from the conflict is also affecting its service business, but the company is beginning to see financial improvement from the plan implemented in FY 2022 to FY 2022 and needs to become clearer in the second half of the year. He concluded, “As we have said before, market recovery will not follow a straight line, and there will be challenges along the way. We are doing our business to meet this challenge wherever we can, continue to provide solutions to our customers and ultimately pay the price to our shareholders. “
GBX opportunistic pullback level
Price action for GBX stocks using rifle charts in weekly and daily time frames provides a precise view of the playing field. The weekly rifle chart reached a double top near 53.58 Fibonacci (Five) layer Before selling sharply at $ 42.43 before trying to rally. Weekly Lower Market Structure (MSL) Purchases triggered by the previous breakout through $ 41.27 and weekly market structure high (MSH) sales triggered a breakdown below $ 50.38. The weekly 5-period moving average flat 15-period MA has started declining at $ 45.22 to $ 50.19, 50-period MA at $ 44.37 and 200-period MA support at $ 37.46. Shares fell so quickly that the weekly stocks immediately fell to the top and the cross to the 80-band test. The Daily Rifle Chart has made a downtrend by crossing the 45.75 crossing of the 5-period MA and the-46.34 crossing below the 50-period MA as the stock tested the 200-period MA at $ 43.93. Daily Bowling Bands (BBs) sit at $ 42.61. The daily stochastic mini reverse puppy made a complete oscillation as it sank to the bottom of the 20-band. Earnings off the sale of shares. Wise investors can see the advantageous pullback levels at $ 43.94 fib, $ 42.32, $ 41.07 fib, $ 39.81 fib, $ 38.19 fib, $ 35.32 fib, and $ 32.08 fib. Upside trajectories range from $ 51.67 fib level to $ 60.47 fib level.