Assessing Greenbrier (GBX) Valuation After a Recent Share Price Rebound

Greenbrier Companies (GBX) has quietly turned in a mixed stretch, with shares up about 7% over the past month but still down roughly 24% this year, leaving value focused investors taking a closer look.

See our latest analysis for Greenbrier Companies.

The recent 1 month share price return of 7.37% suggests some momentum is returning. However, the year to date share price return of negative 24.02 percent and a 1 year total shareholder return of negative 24.03 percent show investors are still reassessing risk, even after a strong 3 year total shareholder return of 51.51 percent and 5 year total shareholder return of 44.97 percent.

If you are weighing whether this rebound has staying power, it can help to compare Greenbrier with other industrial names using aerospace and defense stocks as a starting point for fresh ideas.

With earnings under pressure but a sizable intrinsic value discount implied, investors face a key question: is Greenbrier now a mispriced industrial cyclical worth backing, or is the market already baking in its next leg of growth?

Most Popular Narrative Narrative: 13.2% Undervalued

With Greenbrier last closing at $46.46 against a narrative fair value of $53.50, the story assumes the current discount can gradually close.

The analysts have a consensus price target of $53.5 for Greenbrier Companies based on their expectations of its future earnings growth, profit margins and other risk factors.

In order for you to agree with the analyst's consensus, you'd need to believe that by 2028, revenues will be $2.7 billion, earnings will come to $60.0 million, and it would be trading on a PE ratio of 32.9x, assuming you use a discount rate of 8.3%.

Read the complete narrative.

Curious how shrinking revenue, thinner margins and a far richer earnings multiple can still add up to upside potential? Wondering which assumptions really carry this valuation? Dig into the full narrative to see the specific forecasts driving that 8.3 percent discounted fair value.

Result: Fair Value of $53.50 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, fluctuating trade policies, steel costs and slower railcar orders, particularly in Europe, could quickly undermine the margin and earnings improvements that analysts anticipate.

Find out about the key risks to this Greenbrier Companies narrative.

Build Your Own Greenbrier Companies Narrative

If you would rather challenge these assumptions and dig into the numbers yourself, you can construct a personalized Greenbrier view in just minutes: Do it your way.

A great starting point for your Greenbrier Companies research is our analysis highlighting 2 key rewards and 2 important warning signs that could impact your investment decision.

Looking for more investment ideas?

Before you move on, give yourself the chance to spot stronger opportunities by scanning targeted shortlists built from real fundamentals, momentum trends and long term potential on Simply Wall St.

• Capture potential multi baggers early by scanning these 3629 penny stocks with strong financials that already pair tiny share prices with surprisingly resilient financials.
• Position your portfolio for tomorrow's winners by zeroing in on these 24 AI penny stocks that blend cutting edge innovation with measurable business traction.
• Lock in quality at a discount by filtering for these 902 undervalued stocks based on cash flows where cash flows hint at significantly more upside than the current market price suggests.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com