Bank of America (BofA) has elevated its price target for Wabtec (WAB, Financial) shares to $217, up from $214, while reaffirming a Buy rating. This decision follows Wabtec's robust first-quarter results, where the company reported an adjusted earnings per share (EPS) of $2.28. This figure surpassed both BofA's projection of $2.08 and Wall Street's consensus estimate of $2.04.
In addition to the impressive quarterly performance, Wabtec has adjusted its future guidance by increasing its EPS expectations for 2025, while keeping its revenue forecast for that year unchanged. BofA, in response to these developments, has revised its own EPS estimates for the company, raising them by 1% for both 2025 and 2026. The revised projections now stand at $8.70 and $10.05, respectively.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 9 analysts, the average target price for Westinghouse Air Brake Technologies Corp (WAB, Financial) is $212.25 with a high estimate of $240.00 and a low estimate of $186.24. The average target implies an upside of 16.64% from the current price of $181.97. More detailed estimate data can be found on the Westinghouse Air Brake Technologies Corp (WAB) Forecast page.
Based on the consensus recommendation from 13 brokerage firms, Westinghouse Air Brake Technologies Corp's (WAB, Financial) average brokerage recommendation is currently 2.2, indicating "Outperform" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for Westinghouse Air Brake Technologies Corp (WAB, Financial) in one year is $149.69, suggesting a downside of 17.74% from the current price of $181.97. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the Westinghouse Air Brake Technologies Corp (WAB) Summary page.
WAB Key Business Developments
Release Date: April 23, 2025
- Sales: $2.61 billion, up 4.5% year-over-year.
- Adjusted EPS: Increased by 21% from the previous year.
- Cash Flow from Operations: $191 million for the quarter.
- 12-Month Backlog: $8.2 billion, up 6%.
- GAAP Operating Income: $474 million.
- Adjusted Operating Margin: 21.7%, up 1.9 percentage points.
- GAAP Earnings Per Diluted Share: $1.08, up 22.9% year-over-year.
- Adjusted Earnings Per Diluted Share: $2.28, up 20.6% year-over-year.
- Freight Segment Sales: Up 4.2%.
- Transit Segment Sales: Up 5.3% to $709 million.
- GAAP Gross Margin: 34.5%, up 1.8 percentage points.
- Liquidity Position: $2.54 billion.
- Net Debt Leverage Ratio: 1.5 times.
- Share Repurchases: $98 million during the quarter.
- Dividends Paid: $43 million, with a 25% increase per share.
- 2025 Adjusted EPS Guidance: $8.35 to $8.95, up 14% at the midpoint.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Sales increased by 4.5% to $2.6 billion, with adjusted EPS up 21% from the previous year.
- The 12-month backlog grew by 6% to $8.2 billion, indicating strong business momentum.
- International markets are performing well, with significant opportunities in Africa, Asia, and CIS regions.
- The company secured major orders, including a $300 million service agreement in Kazakhstan and a $140 million order for new locomotives in North America.
- WAB's international revenue has been growing at a high single-digit rate, delivering higher profitability than the North American region.
Negative Points
- Caution is advised for the North American market due to tariff activities and mixed freight business metrics.
- The North American railcar build is expected to decrease by 17% compared to last year.
- Equipment sales decreased by 9.5% due to a shift in capacity to modernizations.
- Foreign currency exchange had an adverse impact on sales and gross profit.
- The economic environment remains uncertain and volatile, requiring proactive cost management.
