Shares of Textainer Group Holdings Limited (NYSE:TGH) soared 69.4% last month after two analysts issued bullish commentary on the container-leasing sector. Meanwhile, fellow container lessors also rebounded sharply as a result of those reports, with CAI International Inc. (NYSE:CAI) and Triton International Limited (NYSE:TRTN) up 66.2% and 42.2%, respectively, last month.
Textainer Group Holdings stock took off toward the end of the month when an analyst at Cowen upgraded it to outperform, citing improving fundamentals. The Cowan analyst said that a recovering market should lead to better financial results from Textainer this year, and that the company would also benefit from the continued rise in container prices due to higher prices for Chinese steel. These factors led the analyst to raise Textainer's price target from $8 to $15.
A couple of days later an analyst from SunTrust raised the bank's price targets for container-leasing companies, due to recent increases in container prices and more favorable supply-and-demand trends. The analyst boosted Textainer Group Holdings' price target from $9.50 to $16, while raising Triton International from $22 to $26 and CAI International from $10 to $18. That said, the analyst did warn that upcoming fourth-quarter results could be "volatile," but that these companies should issue positive outlooks.
It has been a tough couple of years for container-leasing companies. In fact, even with last month's rebound, Textainer's stock remains down more than 60% over the past three years. However, market conditions do appear to be getting better, which should pull Textainer's financial results out of their tailspin.