TD Cowen sees peak for GATX Corp.

GATX Corp (NYSE:) was cut to Market Perform from Outperform, with a new price target of $137, up from $135 at TD Cowen on Wednesday.

Analysts told investors in a note that the firm “can finally see the peak in the distance.”

“We now expect three key metrics to peak late this year: absolute lease rates, secondary market valuations, and GATX’s earnings. For 2024, we expect secondary market valuations to decrease mildly and lease rates and earnings to plateau,” wrote the analysts.

“Meanwhile, the shares are trading at 18.8x 2024 consensus EPS, compared to a five-year historical next-year average P/E of 16.2x,” they added.

The firm raised its GATX 2023 and 2024 EPS estimates to $7 each, which they believe will likely represent peak earnings in this cycle, as they “believe the lease revenue growth benefit next year could be offset by lower remarketing income.”

GATX shares are down around 1.5% at the time of writing on Wednesday, although TD Cowen’s new price target for the stock represents around a 5% upside from Tuesday’s close.