Trinity’s second quarter was marked by continued strength in its leasing business even as market demand for new railcars remained subdued. Management attributed weaker sales to delayed customer capital expenditure decisions, which were influenced by evolving trade and tax policies. CEO Jean Savage described the quarter as a low point in the railcar manufacturing cycle but noted that sequential improvement in order volumes and a healthy lease renewal rate of 89% demonstrated resilience. She added, “We are encouraged by sequential pickup in orders in the second quarter, both for Trinity and for the broader industry.”

Is now the time to buy TRN? Find out in our full research report (it’s free).

While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.

Our Top 5 Analyst Questions From Trinity’s Q2 Earnings Call

• Bascome Majors (Susquehanna): asked about production plans for the second half of the year and if build rates would match improved order trends. CEO Jean Savage confirmed that both deliveries and margins are expected to improve as the year progresses.

• Bascome Majors (Susquehanna): inquired about Trinity's tax management strategy following the purchase of federal tax credits. CFO Eric Marchetto explained that the new tax bill reduces Trinity's cash tax burden and improves operating cash flow.

• Bascome Majors (Susquehanna): questioned the path back to higher manufacturing margins relative to long-term targets. Savage responded that margin recovery will depend on increased volumes and recent investments in automation and efficiency.

• Andrzej Tomczyk (Goldman Sachs): sought clarification on delivery cadence and whether full-year deliveries would ramp more in the fourth quarter. Savage reiterated that volumes should improve through the year, with the biggest gains coming from increased orders.

• Andrzej Tomczyk (Goldman Sachs): asked about the impact of higher steel prices and a potential rail merger on demand. Savage noted that higher steel prices drive scrapping activity, potentially triggering replacement demand, and that industry consolidation could support long-term railcar utilization.

Catalysts in Upcoming Quarters

Looking ahead, the StockStory team will monitor (1) the pace of improvement in railcar deliveries and whether order momentum continues, (2) ongoing lease repricing and utilization trends in the leasing segment, and (3) the impact of evolving tax and trade policies on both customer investment behavior and Trinity’s operating environment. Progress on cost control and production efficiencies will also be key markers of success.

Trinity currently trades at $28.69, up from $25 just before the earnings. In the wake of this quarter, is it a buy or sell? Find out in our full research report (it’s free).

High-Quality Stocks for All Market Conditions

Donald Trump’s April 2025 "Liberation Day" tariffs sent markets into a tailspin, but stocks have since rebounded strongly, proving that knee-jerk reactions often create the best buying opportunities.

The smart money is already positioning for the next leg up. Don’t miss out on the recovery - check out our Top 6 Stocks for this week. This is a curated list of our High Quality stocks that have generated a market-beating return of 183% over the last five years (as of March 31st 2025).

Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-micro-cap company Kadant (+351% five-year return). Find your next big winner with StockStory today.

StockStory is growing and hiring equity analyst and marketing roles. Are you a 0 to 1 builder passionate about the markets and AI? See the open roles here.