Americas Transportation Higher Railcar Prices Supportive of Valuation

Equity Research 21 September 2026 | 3:01AM EDT

Americas Transportation: Higher Railcar Prices Supportive of Valuation; Refreshing EV/Replacement Methodology for Railcar Coverage;

Bottom Line: Given the fairly sharp rise in railcar asset prices over the Andrzej Tomczyk, CFA | post-Covid period (Exhibit 1), driven by higher inflation, elevated commodity Goldman Sachs & Co. LLC prices, and favorable industry supply dynamics, it is likely that owners of railcar Jordan Alliger assets stand to benefit from the increased value of their fleets. Industry supply | fundamentals have been supported by a more consolidated railcar manufacturing Goldman Sachs & Co. LLC

base (2 railcar manufacturers comprise 90% of industry backlog), reduced Paul Stoddard | speculative railcar building relative to prior cycles, and broadly improved utilization Goldman Sachs & Co. LLC of assets by railroads themselves (and therefore less need for excess railcar buffer capacity) following Precision Scheduled Railroading (PSR) implementations. Against Aakarsh Goyal | this backdrop, we refresh our EV-to-replacement-cost analysis and now include Goldman Sachs India SPL TRN and GBX in our analysis in addition to GATX. While our primary price-target methodology remains P/E-based (see GATX, TRN and GBX), we believe the EV to Replacement-Cost analysis helps provide a longer-term perspective on the value of these companies’ durable asset bases, particularly given railcars’ 40-50 year useful lives.

Exhibit 1: The $ Per Railcar Has Been Increasing, Supportive of Higher Replacement Value TRN’s $ per railcar in ending backlog

$ Per New Railcar Over Time $150,000

Average selling price ($ per railcar) $140,000

2014A 2015A 2016A 2017A 2018A 2019A 2020A 2021A 2022A 2023A 2024A 2025A 2026E 2027E 2028E Period

Railcar Selling Price in Manufactuer Backlog GSe

TRN is used as the railcar manufacturer above as a proxy for prices (note: TRN and GBX represent ~90% of North America’s railcar manufacturer backlog)

Source: Company data, Goldman Sachs Global Investment Research

On a relative basis, we continue to favor GATX. Although both TRN and GBX own meaningful leased railcar fleets of approximately 100k and 20k units, respectively, GATX remains the largest owner and lessor of railcar assets globally with a consolidated lease fleet of roughly 250k railcars. We think the scale of GATX’s

Goldman Sachs does and seeks to do business with companies covered in its research reports. As a result, investors should be aware that the firm may have a conflict of interest that could affect the objectivity of this report. Investors should consider this report as only a single factor in making their investment decision. For Reg AC certification and other important disclosures, see the Disclosure Appendix, or go to Analysts employed by non-US affiliates are not registered/qualified as research analysts with FINRA in the U.S.

Goldman Sachs Americas Transportation

platform—particularly as the scale has increased post GATX’s book-value acquisition of Wells Fargo’s railcar fleet which effectively doubled its consolidated North America fleet to 200k from 100k leased railcars—likely positions it to continue to benefit from higher asset values given this should be supportive to booking elevated gains on sale and growing lease rates.

n Higher new-build railcar prices imply a correspondingly higher replacement value for existing fleets. Given the long economic lives of railcar assets, we believe owners are well positioned to realize favorable gains on sale as secondary market values appreciate relative to depreciated book values. In addition, higher replacement costs should support stronger lease rate pricing over time (particularly if more small/medium shippers use rail over time while preferring to lease versus buy expensive railcars). n For GATX specifically, we note that our replacement-cost calculation excludes the company’s aircraft spare engine portfolio, which we view as an additional source of ongoing support given aircraft spare engines are operating within a supply-constrained ecosystem and as engines have experienced sustained price appreciation in the post-Covid environment (see GS Airlines’ Analyst Catie…