GATX CORP (GATX): what the price requires
At today's price, GATX CORP (GATX) is priced for today's economics sustained for ~6.8 years. boothcheck doesn't publish a fair value or a price target; it shows what the price assumes, so you can judge whether that bar is too high.
Generated: 2026-07-14 · Exported: 2026-07-17 · Source: https://boothcheck.com/report/GATX
Headline
| Field | Value |
|---|---|
| Ticker | GATX |
| Company | GATX CORP |
| Current price | $181.07/sh |
| Composition | Rail North America 70% / Rail International 23% / Engine Leasing 7% |
What The Price Requires (Inversion)
The assumption today's price embeds, recovered by inverting the valuation.
| Field | Value |
|---|---|
| Inversion basis | whole-company |
| Operating margin today | 15.4% |
| Must persist for | 6.8y |
| Multiple paid | 67x operating income |
Solve inputs: computed at a 7% cost of capital; growth searched up to the 25% self-funding ceiling; each 1pp moves the implied horizon ~2.6 years (computed at the 7% minimum rate; the CAPM rate 4.9% sits below it).
Reconcile: at the x-ray's 9.3% required return this reads ~12 years; the models below use their own rates.
How unusual the bet is: high
| Reference | Value |
|---|---|
| vs own history | +3.95σ |
| cohort percentile (of 210 peers) | 99 |
| sustained it ~6.8 years at this level | 23% |
| implied end-window share | 0% |
Valuation X-Ray
The price is supported by earnings-power and relative-multiple and growth-DCF value, while asset-based lands below the price. A value/asset-supported name, not a pure growth bet.
How the valuation models price the stock relative to the market price. Price/FV above 1.0 means the market pays more than that lens defends (expensive); at or below 1.0 the lens can defend the price.
| Family | Median price/FV | Models | Reads |
|---|---|---|---|
| Asset | 1.52x | 4 | expensive |
| Earnings | 1.20x | 2 | expensive |
| Relative | 1.11x | 4 | expensive |
| Growth | 0.73x | 2 | justifies |
Families that justify the price: Earnings, Relative, Growth Families that call it expensive: Asset
The models below discount at their own flat-beta convention rates (cost of equity 9.3%, WACC 6.2%); the inversion above states its own rate.
Per-Model Detail (n=12)
| Model | Family | FV | Price/FV | Applicable | Methodology |
|---|---|---|---|---|---|
| DCF Perpetual Growth | Growth | — | — | no | — |
| DCF Exit Multiple | Growth | $389.63 | 0.46x | yes | Exit EV/EBITDA: 25.6x / 27.6x / 29.6x (bear / base = today's held flat / bull), 6yr |
| Relative Valuation | Relative | $127.35 | 1.42x | yes | P/E 20x (static sector reference · 2026-04), scenarios: 16.3x / 20.0x / 23.7x (bear / base = reference held flat / bull), EV/EBITDA 17.38x |
| Simple DDM | Growth | — | — | no | — |
| Two-Stage DDM | Growth | — | — | no | — |
| Simple Excess Return | Asset | $102.73 | 1.76x | yes | BV/sh $77.60, ROE (TTM) 12.2%, ke 9.3% |
| Two-Stage Excess Return | Asset | $117.43 | 1.54x | yes | 5yr excess ROE then converge to ke=9.3% |
| Discounted Future Market Cap | Growth | $182.32 | 0.99x | yes | Rev $1.9B, growth 17% (input: historical growth; tapered), Terminal P/S: 2.8x / 3.4x / 4.0x (bear / base = today's held flat / bull, cap 12x) |
| Peter Lynch Fair Value | Relative | $228.83 | 0.79x | yes | EPS $9.32, growth 25% (input: historical EPS growth), PEG=0.78 (Undervalued) |
| Margin Trajectory | Growth | — | — | no | — |
| Earnings Power Value | Earnings | — | — | no | — |
| Residual Income | Asset | $120.45 | 1.50x | yes | BV $77.60 + 5yr PV of (ROE (TTM) 12.2% − Kₑ 9.3%) × BV; BV grows 8.0%/yr |
| Graham Number | Asset | $127.57 | 1.42x | yes | √(22.5 × EPS $9.32 × BVPS $77.60) — Graham's conservative floor |
| EV/EBITDA Relative | Relative | $0.01 | 18107.00x | yes | EBITDA $0.52B × sector EV/EBITDA 13.0x (excluded from median) |
| FCF Yield | Earnings | $0.01 | 18107.00x | yes | FCF $723.0M / Kₑ 9.3% — zero-growth perpetuity (excluded from median) |
| SBC-Adj FCF Yield | Earnings | $0.01 | 18107.00x | yes | SBC-adj FCF $0.70B (FCF $0.72B − SBC $0.02B) capitalized at Kₑ (excluded from median) |
| Ben Graham Formula | Earnings | $300.73 | 0.60x | yes | EPS $9.32 × (8.5 + 2×15.0%) × (4.4 / 5.3%) |
| ROIC-Justified P/B | Asset | — | — | no | — |
| P/Sales Sector | Relative | $79.71 | 2.27x | yes | Revenue $1.90B × sector P/S 1.5x |
| PEG Fair Value | Relative | $343.24 | 0.53x | yes | EPS $9.32 × (PEG 1.5 × growth 24.6% (input: historical EPS growth)) → PE 36.8x |
| Earnings Yield | Earnings | $100.76 | 1.80x | yes | EPS $9.32 / required return 9.3% (Rf 4.3% + ERP 5.0%) |
| Funds From Operations Multiple | Relative | — | — | no | — |
| Clinical Phase NPV | Growth | — | — | no | — |
| Merton | Asset | — | — | no | — |
| V5 Mechanical | — | — | — | no | — |
Solvency
| Field | Value |
|---|---|
| Net debt | $11.8b |
| Net debt / NOPAT (after-tax) | 51.58x |
| Net debt / operating income (pre-tax) | 40.75x |
| Share count CAGR (buyback) | -0.1% |
| Burning cash | no |
Interest expense is not separately reported in the latest filings, so interest coverage cannot be computed.
Bullet Takeaways
- GATX owns long-lived railcar assets (27 to 45 year useful lives) leased at 98%-plus utilization with Lease Price Index renewals running high-teens to low-20s percent, real pricing power on a scarce hard asset.
- The roughly $4.2 billion Wells Fargo acquisition (via a Brookfield JV) nearly doubled the fleet from about 107,000 to 208,000 cars; management guides 2026 EPS to $9.50-$10.10, with the forward-earnings methods reaching the $177 price.
- The risk is the freight and rate cycle: gross debt above $12.5 billion makes this a spread business, so a freight downturn or normalizing lease rates would squeeze the economics the full multiple assumes persist.
Bull Case
Look at where the $177 price lands against the valuation methods and the read is favorable for an asset-heavy compounder. The excess-return models land near $103 to $117 off a $77.60 book value with a trailing ROE near 12%. The pattern says a value, asset-supported business where the forward-earnings frames reach the price and the conservative ones bracket it, not a stretched growth story.
The asset base behind those frames is unusually durable. GATX owns and leases railcars whose 10-K-disclosed economic useful lives run 27 to 45 years (FY2025 10-K, accession 0000040211-26-000018), real steel assets that throw off contracted lease cash flow for decades. Demand is tight: Rail North America fleet utilization was 98.1% at the end of Q1 2026 after sitting at 99% for the prior quarter, and the commercial team is renewing leases at high-teens to low-20s percent rate increases on the Lease Price Index. When you own a scarce hard asset that customers renew at rising rates, you have genuine pricing power.
The transformational catalyst is scale. Through a joint venture with Brookfield Infrastructure, GATX acquired about 101,000 railcars from Wells Fargo for roughly $4.2 billion, nearly doubling the platform from about 107,000 cars to around 208,000. That makes GATX the dominant independent railcar lessor in North America, with more cars to push rising lease rates across. Management guides 2026 EPS to $9.50 to $10.10 and North America segment profit up $55 million to $65 million to about $415 million. For a business with a multi-decade asset life and rising lease rates, the forward-earnings methods that reach the price are the right ones to weight.
Bear Case
The competitive and structural threat to a railcar lessor is the carload itself: GATX's fortunes are tied to North American freight volumes, and the modes that compete with rail are gaining. Trucking, especially as autonomous and electric long-haul matures, keeps pressure on rail's share of intermediate-haul freight, and the secular decline in coal, historically a major carload category, has permanently shrunk demand for entire car types. When freight softens, lessees do not renew, idle cars pile up, and the 98% utilization that underpins the bull case is the first metric to crack. Utilization already ticked down from 99.2% a year ago to 98.1% in Q1 2026, a small move but the wrong direction.
The doubled fleet amplifies that cyclicality rather than dampening it. The roughly $4.2 billion Wells Fargo acquisition was funded with debt, and GATX now carries gross debt above $12.5 billion. Leasing is a spread business, so it works when GATX borrows cheaply and leases at higher rates, but in a higher-for-longer environment its own funding cost rises while a freight downturn would press lease rates down, squeezing the spread from both sides. Integrating 101,000 cars from another lessor also carries execution risk on maintenance, repricing, and customer retention that a smaller fleet would not.
The valuation leaves little margin for a cycle turn. The price already sits above the relative-valuation, excess-return, and several conservative frames, and on a backward-looking basis the earnings-power and EV/EBITDA methods break down because trailing reported operating income is thin relative to the asset base, a reminder that the equity value rests heavily on lease economics persisting at today's elevated rates. The Lease Price Index increases of high teens to low 20s percent are running well above long-run averages; if rate growth normalizes toward mid-single digits as new car supply catches up, the forward-earnings frames that justify the price come down with it. A capital-intensive lessor at a full multiple is exposed to exactly the freight and rate cycle the current price assumes stays benign.
Valuation
GATX is an asset-heavy lessor, so the inversion reads off operating-income persistence rather than rapid growth: at $177.16 the price implies roughly 6.7 years of duration on the model's lever against a current operating margin near 15.2%, and the engine characterizes it as supported by earnings-power, relative-multiple, and growth-DCF value. A leasing balance sheet distorts several backward-looking models, so the X-ray has to be read with that in mind.
The usable frames cluster around and above the price. The relative-valuation method lands near $127 on a sector-median 20x P/E, the excess-return models near $103 to $117 off a $77.60 book value with 12% trailing ROE, residual income near $120, the Graham number near $128, the discounted-future-market-cap method near $178, and the exit-multiple DCF as high as $386. The blended landing across applicable methods is near $127. The earnings-power, FCF-yield, and EV/EBITDA methods collapse to negligible values because trailing reported operating income is small relative to the lease-heavy capital base, which is a quirk of leasing accounting rather than a sign of distress, so those readings should be discounted.
The honest read is that the equity is priced on lease economics holding at elevated rates. With Lease Price Index increases running in the high teens to low 20s percent and 2026 EPS guided to $9.50 to $10.10, the forward methods justify the price, while the backward-looking ones bracket it. The peer set the model returned, EXPE, GXO, XPO, and BKNG, is travel and logistics rather than a clean railcar-lessor comparable, so peer multiples carry little weight here; GATX is better judged against its own asset returns and the freight cycle. Net debt above $12 billion is structural for a lessor and serviceable at 3x interest coverage, but it means the spread between funding cost and lease rate is the variable that decides the equity value.
Catalysts
GATX reported Q1 2026 with EPS of $2.35 and reaffirmed full-year 2026 EPS guidance of $9.50 to $10.10. Rail North America fleet utilization was 98.1% at quarter end (down from 99.0% the prior quarter and 99.2% a year earlier), with the commercial team achieving higher renewal lease rates and longer terms. Guidance calls for Lease Price Index increases in the high teens to low 20s percent for the year, North America segment profit rising $55 million to $65 million to about $415 million, engine-leasing segment profit of $180 million to $185 million, and roughly $200 million of railcar disposition gains.
The defining catalyst is the integration of the roughly 101,000 railcars acquired from Wells Fargo through the Brookfield Infrastructure joint venture for about $4.2 billion, which nearly doubled the platform to around 208,000 cars. The key data points to watch are whether utilization holds in the guided 98% to 99% range across the expanded fleet, whether Lease Price Index increases stay elevated as new car supply enters the market, and how the funding cost on the deal-related debt trends against lease-rate growth. North American freight volumes are the macro variable that drives all of it.
Sources: GATX Q1 2026 results and 2026 guidance (StockTitan, Seeking Alpha, Trains.com, 2026); FY2025 10-K (accession 0000040211-26-000018).
Peer Cohorts (Per Segment, With Filing Citations)
Rail North America / Rail International / Other (reported)
- TRN (TRINITY INDUSTRIES INC)
- (no filing in the citation store)
- GBX (THE GREENBRIER COMPANIES, INC.)
- (no filing in the citation store)
- AER (AerCap Holdings N.V.)
- (no filing in the citation store)
- FTAI (FTAI AVIATION LTD.)
- (no filing in the citation store)
- WLFC (WILLIS LEASE FINANCE CORP)
- (no filing in the citation store)
Engine Leasing (reported)
- WLFC (WILLIS LEASE FINANCE CORP)
- (no filing in the citation store)
- AER (AerCap Holdings N.V.)
- (no filing in the citation store)
- FTAI (FTAI AVIATION LTD.)
- (no filing in the citation store)
Methodology Note
- Priced-in inversion: the valuation is inverted on the current price to recover the operating-income growth, duration, and steady-state margin the price embeds (ROE for financials, FFO growth for REITs).
- Valuation x-ray: the valuation models, grouped into four families (asset, earnings, relative, growth). Each model is expressed as a price/FV ratio (distance from price), not a point fair-value estimate. The spread across families is the disagreement.
- Solvency: net cash/debt, net-debt-to-NOPAT, interest coverage, and share-count CAGR from EDGAR financials (net debt / FFO and fixed-charge coverage for REITs; regulatory-capital framing for financials).
- Peer cohorts: per-segment comparables with deep-linkable SEC filing citations.
Fundamentals sourced from SEC EDGAR filings. Current price from Databento. The priced-in inversion and valuation x-ray are computed by the boothcheck engine; narrative composed by AI from the structured data.