Bank of America Securities analyst Ken Hoexter reiterated a Buy rating on Westinghouse Air Brake Technologies yesterday and set a price target of $236.00.
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Ken Hoexter has given his Buy rating due to a combination of factors that highlight the strategic acquisition of Frauscher Sensor Technology by Westinghouse Air Brake Technologies (WAB). The acquisition positions WAB as a leader in train detection systems, with Frauscher holding a significant global market share in axle counters. This acquisition is expected to enhance WAB’s growth prospects, particularly in Europe and India, where railway infrastructure development is poised for expansion.
Furthermore, the financial metrics of the acquisition are favorable, with WAB paying a multiple of 12.4 times the projected 2025 EBITDA, adjusted for anticipated cost synergies. These synergies are expected to contribute to earnings per share accretion of $0.20 in the first year post-acquisition, with further benefits in the following years. The acquisition is anticipated to be accretive to both adjusted EBIT margins and adjusted EPS, supporting the increased price objective of $236. The robust backlog, improving margins, and synergy opportunities further justify the Buy rating.
In another report released on June 24, KeyBanc also maintained a Buy rating on the stock with a $240.00 price target.
Based on the recent corporate insider activity of 100 insiders, corporate insider sentiment is negative on the stock. This means that over the past quarter there has been an increase of insiders selling their shares of WAB in relation to earlier this year.