Morgan Stanley analyst Angel Castillo has maintained their bullish stance on WAB stock, giving a Buy rating yesterday.
Angel Castillo has given his Buy rating due to a combination of factors related to Westinghouse Air Brake Technologies’ strategic acquisition of Dellner Couplers. This acquisition is seen as a significant enhancement to WAB’s Transit product portfolio, which not only broadens their offerings but also strengthens their financial profile. The acquisition is expected to be accretive to WAB’s earnings, contributing positively to revenue growth, EBIT margins, and adjusted EPS in the first year, as well as improving return on invested capital over time.
Financially, the transaction is valued at approximately 12.5 times the estimated 2025 EBITDA, adjusted for transaction costs and anticipated cost synergies. The acquisition is projected to enhance the Transit segment’s EBITDA margins significantly, both pre- and post-synergies. Additionally, strategically, this move positions WAB as the leading producer of transit market couplers globally, elevating its market standing and competitive edge.
Castillo covers the Industrials sector, focusing on stocks such as WillScot Mobile Mini Holdings, United Rentals, and Westinghouse Air Brake Technologies. According to TipRanks, Castillo has an average return of -0.3% and a 55.68% success rate on recommended stocks.
In another report released yesterday, Bank of America Securities also reiterated a Buy rating on the stock with a $214.00 price target.