Skip to main content

Market Overview

US Court Of Appeals Reverses Judgment Against Trinity, Look For Stock To Trade Higher

Share:
US Court Of Appeals Reverses Judgment Against Trinity, Look For Stock To Trade Higher

Trinity Industries Inc (NYSE: TRN) traded up 11.9 percent Monday after winning a critical legal appeal after-hours Friday, but Stifel sees more room for upside.

Analysts Michael Baudendistel and Brady Cox had previously estimated that a reversal of the U.S. Court of Appeals’ initial judgment would stimulate at least a 10-percent pop in stock price, and implications on related cases filed on the basis of the initial verdict would drive value further.

Now, they believe Friday’s ruling could increase the possibility of delayed share repurchases and other strategic initiatives, especially considering Trinity had amassed significant liquidity in anticipation of a $682 million payment.

Related Link: How The Toys R Us Bankruptcy Will Be Different From KB Toys

“Given recent comments from management about sellers' valuation expectations being elevated, which lead us to believe there is no M&A activity imminent, we believe significant capital could be returned to shareholders via share repurchases in the near-term, which could provide additional upside,” Baudendistel and Cox wrote in a weekend note.

At the same time, they suspect that the immediate effects of the latest ruling may have been muted by anticipation of a positive outcome justified by mid-March legal precedents.

“We believe the decision issued today [Friday] may come as less of a surprise relative to the favorable developments in the case recently,” Baudendistel and Cox wrote.

Stifel reiterated a Buy rating on the stock and raised its price target from $31 to $42. KeyBanc and Citigroup also maintain Buys on the news.

At the time of publication, Trinity was trading at $35.35, up 10.7 percent on the day.

Related Link: A Top Steel Analyst Highlights Acute Risk To Trinity Industries' 2018 Operating Margin

______
Image Credit: By Roy Luck [CC BY 2.0 (http://creativecommons.org/licenses/by/2.0)], via Wikimedia Commons

Latest Ratings for TRN

DateFirmActionFromTo
Jul 2021SusquehannaUpgradesNeutralPositive
Jul 2021Wells FargoMaintainsOverweight
Jan 2021GLJ ResearchUpgradesSellBuy

View More Analyst Ratings for TRN

View the Latest Analyst Ratings

 

Related Articles (TRN)

View Comments and Join the Discussion!

Posted-In: Analyst Color Long Ideas News Price Target Reiteration Legal Analyst Ratings Trading Ideas Best of Benzinga

Latest Ratings

StockFirmActionPT
SEDGB of A SecuritiesMaintains411.0
PTLOPiper SandlerMaintains28.0
AOUTLake StreetMaintains26.0
RAPTPiper SandlerMaintains52.0
OCXLake StreetMaintains6.0
View the Latest Analytics Ratings
Don't Miss Any Updates!
News Directly in Your Inbox
Subscribe to:
Benzinga Premarket Activity
Get pre-market outlook, mid-day update and after-market roundup emails in your inbox.
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Fintech Focus
A daily collection of all things fintech, interesting developments and market updates.
SPAC
Everything you need to know about the latest SPAC news.
Thank You

Thank you for subscribing! If you have any questions feel free to call us at 1-877-440-ZING or email us at vipaccounts@benzinga.com