Freightcar America RAIL manufactures and supplies railroad freight cars, railcar parts and components. The company has been benefiting from the improved railcar market. RAIL’s shares have performed impressively on the bourse so far this year. If you have not taken advantage of RAIL’s share price appreciation yet, it’s time to do so.

Factors Favoring RAIL Stock

Robust Price Performance:  Its shares have surged 261.1% year to date, surpassing the industry’s 30.2% growth.

Year-to-Date Price Performance

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Northward Estimate Revisions: The Zacks Consensus Estimate for earnings per share for the current year improved 8.7% in the past 60 days. For the next year, the consensus mark for earnings per share has moved 65.1% north at the same time. The favorable estimate revisions indicate brokers’ confidence in the stock.

RAIL’s Solid Zacks Rank: RAIL currently carries a Zacks Rank #2 (Buy).

Bullish Industry Rank: The industry to which Freightcar America belongs currently has a Zacks Industry Rank of 69 (out of 251). Such a favorable rank places it in the top 27% of Zacks industries. Studies have shown that 50% of a stock price movement is directly related to the performance of the industry group it belongs to.

A mediocre stock within a strong group is likely to outclass a robust stock in a weak industry. Reckoning the industry’s performance becomes imperative.

Growth Drivers: Higher railcar deliveries are boosting the company's top line, which increased 66% year over year in second-quarter 2024. RAIL's focus on increasing production efficiency is commendable. Efforts to bring down debt levels are also praiseworthy. Driven by the buoyant scenario, RAIL expects current-year revenues between $560 million and $600 million (the mid-point of the range indicates 62% year-over-year growth) with railcar deliveries in the 4,300-4,700 range.

Other Stocks to Consider

Investors interested in the Zacks Transportation sector may also consider C.H. Robinson Worldwide CHRW and Air Transport Service Group ATSG.

C.H. Robinson Worldwide currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here. 

CHRW has an expected earnings growth rate of 25.2% for the current year. The company has an impressive earnings surprise history. Its earnings outpaced the Zacks Consensus Estimate in three of the trailing four quarters and missed once, delivering an average surprise of 7.3%. Shares of CHRW have risen 47.7% in the past six months.

ATSG carries a Zacks Rank #2 at present and has an expected earnings growth rate of 12% for the current year. The company has a mixed track record with respect to the earnings surprise, having surpassed the Zacks Consensus Estimate in two of the trailing four quarters and missing twice. The average miss is 7.7%. Shares of ATSG have climbed 18.5% in the past six months.

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C.H. Robinson Worldwide, Inc. (CHRW) : Free Stock Analysis Report

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