July 04, 2011

At their current trading levels, Krukiv Wagon and Stakhanov Wagon offer an attractive opportunity to cash in on the fast-growing CIS freight railcar market. The companies’ strong production results, along with galloping freight car price growth, have led us to adjust our valuations upward for both companies. We raise our target price for Krukiv Wagon to USD 6.44 per share, implying 117% upside, and also increase our target price for Stakhanov Wagon to USD 1.69 per share, implying 82% upside. We reiterate our BUY recommendations on both stocks.