Trinity upgraded on railcar and barge businesses

NEW YORK -- A Raymond James analyst upgraded shares of industrial manufacturer Trinity Industries Inc. on Tuesday, saying he expects better results for its inland barge and railcar businesses.

THE OPINION: Analyst Arthur Hatfield raised his rating on Trinity shares to "Strong Buy" from "Market Perform" and set a price target of $39 per share. Trinity said its revenue from its rail group business climbed more than 80 percent in the second quarter, and Hatfield said the inland barge division should get a boost from "many of the same fundamental trends."

Hatfield said the market for barges and railcars in the transportation of natural gas seems stronger than he expected, and Trinity will benefit from the slow development or cancellation of natural gas pipelines.

On July 25 the Dallas company said its revenue grew 45 percent in the second quarter, with rail group revenue climbing 84 percent to $516.9 million and inland barge revenue up 48 percent to $173.9 million. Trinity also raised its annual net income guidance to a range of $2.95 to $3.10 per share, up from $2.55 to $2.70 per share.

Analysts currently expect the company to earn $3.07 per share, according to FactSet. Before Trinity raised its forecast they expected earnings of $2.73 per share on average.

THE STOCK: Shares of Trinity Industries gained 60 cents, or 1.9 percent, to $32 in afternoon trading as the broader markets traded lower. Trinity stock has gained almost 40 percent since July 25.