Shares of Trinity Industries advanced sharply in premarket trading Friday, climbing approximately 9% to $34.58. The move extends a recent rally for the railcar manufacturer, driven by an optimistic financial forecast for 2026.
Strong Forward Guidance
The company issued 2026 earnings per share guidance in the range of $1.85 to $2.10. Chief Executive Jean Savage attributed the projection to expectations for firmer lease rates, increased activity in the secondary market for railcars, and stable operating margins. Savage noted that while lease rates are generally rising, the pace of increase has moderated in some specific railcar categories.
Management anticipates industry-wide deliveries of approximately 25,000 new railcars in 2026, a figure they describe as remaining below the level needed to replace retiring fleets. Chief Financial Officer Eric Marchetto highlighted that the estimated market value of the company's railcar fleet is 35% to 45% above its carrying value on the books, and signaled a potential fleet simplification initiative in the second quarter.
Fourth-Quarter Performance
For the final quarter of the year, Trinity reported revenue of $611.2 million, a decrease from $629.4 million in the prior-year period. However, diluted earnings per share rose significantly to $2.31, up from $0.38, bolstered by a $194 million non-cash, pre-tax gain related to the restructuring of a railcar partnership.
Operational metrics remained robust. Utilization of the company's lease fleet reached 97.1%. The backlog of future business was approximately $1.7 billion. A key metric, the future lease rate differential—which estimates potential changes in lease rates for contracts expiring over the next year—stood at 6% at quarter-end.
Analyst Reaction
Following the report, Goldman Sachs raised its price target for Trinity to $33 while maintaining a Neutral rating. The firm's research noted that the company's leasing segment is demonstrating relative resilience compared to its manufacturing operations, which it characterized as still subdued.
The company operates through its TrinityRail platform, providing railcar leasing, maintenance, and logistics services across North America. Its financial results are reported in two segments: Railcar Leasing and Services, and Rail Products.
In a regulatory filing, Trinity noted it is not providing quantitative reconciliations for certain forward-looking non-GAAP financial measures, citing the inherent difficulty in forecasting items such as portfolio sales and capital expenditures. This disclosure highlights additional uncertainty should the pace of railcar sales or other transactional activity change materially.