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Trinity Industries (TRN)
NYSE:TRN

Trinity Industries (TRN) AI Stock Analysis

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Trinity Industries

(NYSE:TRN)

Rating:77Outperform
Price Target:
$30.00
▲(14.33%Upside)
Trinity Industries' strong financial performance is the primary driver of its stock score, supported by robust cash flow and improved profitability. Technical indicators and valuation suggest a balanced outlook, with some caution due to longer-term technical weakness. Despite mixed earnings call sentiment, the company maintains solid lease fleet performance and strategic stability, supported by positive corporate events.

Trinity Industries (TRN) vs. SPDR S&P 500 ETF (SPY)

Trinity Industries Business Overview & Revenue Model

Company DescriptionTrinity Industries, Inc. is a diversified industrial company that specializes in providing products and services to the transportation industry, predominantly in North America. The company operates through its principal business segments: Railcar Leasing and Management Services Group, Rail Products Group, and All Other. Trinity is known for manufacturing and leasing railcars, as well as offering railcar maintenance, management, and other related services.
How the Company Makes MoneyTrinity Industries generates revenue primarily through its Railcar Leasing and Management Services segment, which involves leasing a diverse fleet of railcars to customers across multiple industries, including agriculture, construction, energy, and chemicals. This segment provides stable, recurring income through long-term lease agreements. Additionally, the Rail Products Group manufactures railcars and railcar components, contributing to revenues through sales to railroad companies, leasing companies, and industrial shippers. Apart from these, Trinity also earns from its railcar management and maintenance services, ensuring customer rail fleets operate efficiently. Key partnerships with customers in various sectors and a strong market presence in the rail industry significantly bolster its earnings.

Trinity Industries Earnings Call Summary

Earnings Call Date:May 01, 2025
(Q1-2025)
|
% Change Since: 4.54%|
Next Earnings Date:Jul 30, 2025
Earnings Call Sentiment Neutral
The earnings call reflects a mixed sentiment. While Trinity Industries showcased strong lease fleet performance and some positive financial metrics, significant challenges were acknowledged, including a decline in railcar deliveries, lower revenues, and impacts from market uncertainty.
Q1-2025 Updates
Positive Updates
Safety Milestone Achievement
The Jonesboro maintenance facility achieved a significant milestone by going 5 years without a lost time incident, highlighting Trinity's commitment to safety.
Strong Lease Fleet Performance
The lease fleet utilization was at 96.8% with a future lease rate differential of 17.9%. Renewal lease rates were 29.5% above expiring rates, and fleet utilization remained favorable at nearly 97%.
Positive Financial Metrics
Adjusted return on equity was 14.2%, and GAAP EPS was $0.29 despite a 38% decrease in external deliveries year-over-year.
Successful Lease Portfolio Sales
Completed $34 million of lease portfolio sales with gains of $6 million.
Negative Updates
Decline in Railcar Deliveries
Delivered 3,060 new railcars in the quarter, with orders for only 695 railcars, indicating a slowdown in customer capital decisions.
Lower Revenues and Operating Margins
Quarterly revenue was down due to lower railcar deliveries, and operating margin for the Rail Products Group was 6.2%, down both sequentially and year-over-year.
Impact from Market Uncertainty
Market uncertainty slowed conversion inquiries to orders, leading to a revised lower full-year industry delivery guidance of 28,000 to 33,000 railcars.
Weather and Compliance Impact on Maintenance
Weather impacted results for the maintenance business with lost weeks in January and February, and increased maintenance costs due to a heavy tank car compliance year.
Company Guidance
During the first quarter of 2025, Trinity Industries reported GAAP earnings per share of $0.29 on revenues of $585 million, despite a 38% year-over-year decrease in external deliveries. Their adjusted return on equity over the last 12 months was 14.2%, and the lease fleet utilization was at 96.8%, with a future lease rate differential of 17.9%. The company delivered 3,060 new railcars and received orders for 695 railcars, resulting in a backlog of $1.9 billion. Trinity's guidance estimates industry railcar deliveries between 28,000 and 33,000 units for the year, with net fleet investment expected to be between $300 million to $400 million. Additionally, Trinity anticipates a full-year EPS ranging from $1.40 to $1.60 per share. The company remains focused on maintaining high fleet utilization and capitalizing on lease rate expansions, despite the current macroeconomic challenges.

Trinity Industries Financial Statement Overview

Summary
Trinity Industries shows strong financial improvement with increased revenue and profitability, a debt-free balance sheet in 2024, and robust cash flow generation. However, the relatively small equity base compared to total liabilities presents a potential risk.
Income Statement
82
Very Positive
Trinity Industries demonstrated strong revenue growth with a 3.22% increase from 2023 to 2024. The gross profit margin improved to 21.70% in 2024, indicating enhanced operational efficiency. The net profit margin also rose to 4.50%, reflecting better profitability. The EBIT and EBITDA margins show significant improvements, underscoring operational resilience. However, the company faced challenges in previous years, including net losses in 2020 and 2021.
Balance Sheet
75
Positive
Trinity Industries has significantly improved its financial position with no total debt by 2024, compared to previous years. The equity ratio stands at 14.80%, indicating a moderate proportion of assets financed by equity. The return on equity is 10.59%, showing a reasonable return for shareholders. However, the company’s equity base is relatively small compared to its total liabilities, which could be a potential risk if not managed carefully.
Cash Flow
88
Very Positive
The company has shown a remarkable turnaround in its cash flow position, generating a strong operating cash flow of $588.1 million in 2024, with a substantial free cash flow increase from a deficit in 2023 to a positive $588.1 million. The operating cash flow to net income ratio is robust, indicating good cash generation relative to net income. The free cash flow to net income ratio is also favorable, suggesting efficient cash utilization.
Breakdown
TTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income StatementTotal Revenue
2.85B3.08B2.98B1.98B1.52B2.00B
Gross Profit
642.60M668.20M527.10M367.70M354.50M491.00M
EBIT
448.80M491.50M417.00M-92.50M-89.30M-157.40M
EBITDA
676.10M789.10M707.70M458.00M439.90M-68.30M
Net Income Common Stockholders
136.80M138.40M106.00M98.90M39.30M-226.10M
Balance SheetCash, Cash Equivalents and Short-Term Investments
132.00M228.20M105.70M79.60M167.30M132.00M
Total Assets
8.70B8.83B8.91B8.72B8.24B8.70B
Total Debt
5.02B5.69B5.75B5.61B5.17B5.02B
Net Debt
4.88B5.46B5.65B5.53B5.00B4.88B
Total Liabilities
6.69B7.53B7.63B7.45B6.94B6.69B
Stockholders Equity
1.74B1.06B1.04B1.01B1.03B1.74B
Cash FlowFree Cash Flow
25.10M-21.90M-414.50M-979.60M41.00M-52.80M
Operating Cash Flow
600.00M573.80M295.60M-12.80M611.80M651.70M
Investing Cash Flow
-186.50M-214.60M-363.00M-260.70M276.30M-532.90M
Financing Cash Flow
-411.60M-211.00M8.20M265.40M-814.10M-168.00M

Trinity Industries Technical Analysis

Technical Analysis Sentiment
Positive
Last Price26.24
Price Trends
50DMA
25.58
Positive
100DMA
28.50
Negative
200DMA
31.65
Negative
Market Momentum
MACD
0.08
Negative
RSI
52.69
Neutral
STOCH
50.52
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TRN, the sentiment is Positive. The current price of 26.24 is above the 20-day moving average (MA) of 25.92, above the 50-day MA of 25.58, and below the 200-day MA of 31.65, indicating a neutral trend. The MACD of 0.08 indicates Negative momentum. The RSI at 52.69 is Neutral, neither overbought nor oversold. The STOCH value of 50.52 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TRN.

Trinity Industries Risk Analysis

Trinity Industries disclosed 39 risk factors in its most recent earnings report. Trinity Industries reported the most risks in the "Production" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks

Trinity Industries Peers Comparison

Overall Rating
UnderperformOutperform
Sector (66)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
WAWAB
83
Outperform
$34.38B31.4910.62%0.50%5.21%24.15%
NSNSC
78
Outperform
$56.84B17.2224.52%2.16%0.70%135.08%
TRTRN
77
Outperform
$2.15B16.1714.14%4.64%-9.40%8.41%
72
Outperform
$208.86M5.8923.08%-8.75%354.10%
GBGBX
68
Neutral
$1.43B7.2314.69%2.80%-5.79%82.71%
66
Neutral
$4.46B12.155.40%4.71%4.16%-11.97%
59
Neutral
$167.86M156.43%12.58%34.10%
* Industrials Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
TRN
Trinity Industries
26.24
-3.83
-12.74%
RAIL
Freightcar America
8.37
4.75
131.22%
GBX
Greenbrier
45.44
-4.00
-8.09%
FSTR
L. B. Foster Company
19.49
-3.04
-13.49%
NSC
Norfolk Southern
252.93
32.06
14.52%
WAB
Westinghouse Air Brake Technologies
200.81
39.99
24.87%

Trinity Industries Corporate Events

Executive/Board ChangesShareholder Meetings
Trinity Industries Holds Annual Stockholder Meeting
Positive
May 19, 2025

On May 15, 2025, Trinity Industries, Inc. held its annual meeting of stockholders, where three proposals were voted on. The stockholders elected eight directors for a one-year term, approved executive officer compensation, and ratified the appointment of Ernst & Young LLP as the independent registered public accounting firm for 2025. These decisions reflect continued support for the company’s leadership and financial management, potentially impacting its strategic direction and stakeholder confidence.

The most recent analyst rating on (TRN) stock is a Hold with a $35.00 price target. To see the full list of analyst forecasts on Trinity Industries stock, see the TRN Stock Forecast page.

Business Operations and StrategyFinancial Disclosures
Trinity Industries Reports Strong Q1 2025 Financial Results
Positive
May 1, 2025

Trinity Industries announced its first quarter 2025 financial results, reporting earnings of $0.29 per diluted share and generating $78 million in operating cash flow. The company delivered 3,060 railcars and maintained a high lease fleet utilization rate of 96.8%. Despite facing external challenges, Trinity achieved a positive Future Lease Rate Differential of 17.9% and continues to see robust demand in its Railcar Leasing and Services segment. The company has a backlog of $1.9 billion and expects industry deliveries of 28,000 to 33,000 railcars in 2025. Management remains confident in the long-term fundamentals of the business, despite short-term impacts from delayed customer ordering decisions.

Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.