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

Higher new-build railcar prices imply a correspondingly higher replacement n 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). For GATX specifically, we note that our replacement-cost calculation excludes