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With a market cap of $32.8 billion, Westinghouse Air Brake Technologies Corporation (WAB) provides technology-driven locomotives, equipment, systems, and services for the global freight rail and passenger transit industries. Operating through its Freight and Transit segments, the company offers propulsion systems, braking equipment, HVAC systems, digital solutions, and comprehensive aftermarket services.
Shares of the rail locomotive maker have outperformed the broader market over the past 52 weeks. WAB has climbed 42.9% over this time frame, while the broader S&P 500 Index ($SPX) has rallied nearly 23%. However, shares of WAB are up 1.3% on a YTD basis, lagging behind SPX’s 4% gain.
Focusing more closely, the Pittsburgh, Pennsylvania-based company has outpaced the Industrial Select Sector SPDR Fund’s (XLI) 17.2% return over the past 52 weeks.
Shares of Wabtec tumbled 9.1% on Feb. 12 due to its 2025 profit forecast falling short of analysts' expectations, with adjusted EPS projected between $8.35 and $8.75. Weak demand for new locomotives, driven by a slowdown in freight activity and lower consumer goods demand, further pressured investor sentiment. Additionally, uncertainty surrounding tariffs and future freight demand led railroads to delay investments in new equipment. The company also reported weaker-than-expected Q4 2024 adjusted EPS of $1.68 and net sales of $2.6 billion.
For the current fiscal year, ending in December 2025, analysts expect WAB’s EPS to grow nearly 13% year-over-year to $8.54. The company's earnings surprise history is mixed. It topped the consensus estimates in three of the last four quarters while missing on another occasion.
Among the nine analysts covering the stock, the consensus rating is a “Moderate Buy.” That’s based on six “Strong Buy” ratings and three “Holds.”
This configuration is slightly more bullish than three months ago, with five “Strong Buy” ratings on the stock.
On Feb. 13, Susquehanna lowered Wabtec's price target to $218 while maintaining a “Positive” rating, citing revenue growth concerns after weak Q4 results and a cost-driven five-year outlook. However, the firm noted that with lowered expectations, Wabtec has a chance to outperform by 2026.
As of writing, WAB is trading below the mean price target of $217.67. The Street-high price target of $240 implies a potential upside of 24.9% from the current price levels.
