Machinery
January 18, 2011
Stakhanov Wagon: Pushing the Envelope - Stakhanov Wagon recently announced a plan to lift its freight railcar production by 21% YoY, to 9,000 units, in 2011. Over the next three years, the company intends to invest more than USD 100mn in order to expand its production capacity and take advantage of an expected spike in freight car demand from Russia. We revise our model to incorporate Stakhanov Wagon’s higher 2011 output target and its medium-term expansion plans, which we view as realistic. We reiterate our BUY recommendation on the SVGZ stock, and raise our target price to USD 1.56 per share, implying a 24% potential upside to the current price.
