American Railcar Industries, Inc. (ARII)

[OptionMonster]

Greenbrier falls after Icahn drops combination plans

SAN FRANCISCO (Thomson Financial) - Shares of Greenbrier Cos. slipped Thursday after investor Carl Icahn dropped plans to explore a business combination with the company.

Morgan Keegan downgraded the maker of railroad cars to market perform from outperform on the news.

"In light of this news and given the current state of the new railcar market, we do not believe there are significant near term catalysts to drive earnings upside or multiple expansion in the near term," analyst Art Hatfield
wrote in a note to clients.

The broker had previously upgraded Greenbrier after Icahn, the largest shareholder of American Railcar Industries, revealed in February that he had a 10% stake in Greenbrier and was pursuing a potential combination between the
companies.

Hatfield maintained his fiscal 2008 and 2009 earnings estimates for Greenbrier, despite the downgrade, and said his current thesis on the rail supply sector is unchanged.

"We currently believe that the oversupply of railcars in the industry and the general weak freight environment will provide headwinds for substantial earnings growth in the near term."