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Westinghouse Air Brake Technologies Corporation (WAB), also known as Wabtec, is a global leader in transportation solutions valued at a market cap of $34.2 billion. Headquartered in Pittsburgh, Pennsylvania, the company specializes in advanced technologies and services for the rail and transit industries.
Shares of WAB have substantially outperformed the broader market over the past year. WAB has gained 72.3% over this time frame, while the broader S&P 500 Index ($SPX) has rallied nearly 32.1%. Also, in 2024, the stock is up 59%, compared to the SPX’s 26.2% rise on a YTD basis.
Narrowing the focus, WAB has also surpassed the Industrial Select Sector SPDR Fund (XLI). The exchange-traded fund has gained 35.1% over the past year and 26.1% on a YTD basis.
Adding to its robust momentum over the past year, WAB is advancing its Transit business through strategic acquisitions, purchasing Fanox and Kompozitum for $110 million in cash, funded through cash reserves and a revolving credit facility. These acquisitions are expected to immediately boost the company’s earnings, excluding transaction costs, while expanding its product portfolio and customer base.
On Oct. 23, WAB released its third-quarter earnings, and its shares dropped 1.3%. Its adjusted EPS of $2 surpassed Street’s estimates, and revenue of $2.7 billion also beat the market’s projections. The company expects full-year earnings in the range of $7.45 to $7.65 per share, with revenue in the range of $10.25 billion to $10.55 billion.
For the current fiscal year, ending in December, analysts expect WAB’s EPS to grow 28.6% year over year to $7.61 on a diluted basis. The company's earnings surprise history is mixed. It missed the consensus estimate in three of the last four quarters while beating the forecast on another occasion.
Among the nine analysts covering WAB stock, the consensus rating is a “Moderate Buy.” That’s based on five “Strong Buy” ratings, one “Moderate Buy,” and three “Holds.”
This consensus has been fairly consistent over the past months.
On November 13, KeyBanc analyst Steve Barger reaffirmed his “Buy” rating on Westinghouse Air Brake Technologies and maintained a price target of $220.
The mean price target of $214.56 represents a 6.4% premium compared to WAB’s current price levels. The Street-high price target of $231 suggests an upside potential of 14.5%.
