Westinghouse Air Brake Technologies (WAB)
NYSE:WAB

Westinghouse Air Brake Technologies (WAB) AI Stock Analysis

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Westinghouse Air Brake Technologies

(NYSE:WAB)

69Neutral
Wabtec's robust financial performance and strategic growth initiatives drive a strong overall stock score. However, the current technical indicators point to bearish momentum, and high valuation relative to peers tempers the outlook. The company's guidance and successful earnings call reflect confidence in future growth, supported by international market strength and strategic acquisitions.
Positive Factors
Acquisition
The acquisition of Dellner Couplers strengthens WAB's Transit product portfolio and financial profile.
Earnings Outlook
Wabtec set a new 5-year outlook targeting double-digit EPS growth, led by mid-single-digit organic sales growth and significant margin expansion.
Technology Innovation
The Rail Ghost project, an autonomous car inspection machine, could help save tens of millions of dollars in annual inspection costs.
Negative Factors
Earnings Performance
WAB traded off -9% following a 4Q miss and a softer than expected 2025 guide as midpoints of revenue and EPS trailed consensus.
Revenue Target
The company plans to eliminate $100 million of low margin revenues, which contributes to a muted revenue target.

Westinghouse Air Brake Technologies (WAB) vs. S&P 500 (SPY)

Westinghouse Air Brake Technologies Business Overview & Revenue Model

Company DescriptionWestinghouse Air Brake Technologies Corporation provides technology-based equipment, systems, and services for the freight rail and passenger transit industries worldwide. It operates through two segments, Freight and Transit. The Freight segment manufactures and services components for new and existing freight cars and locomotives; builds new commuter locomotives; rebuilds freight locomotives; supplies railway electronics, positive train control equipment, signal design, and engineering services; and provides related heat exchange and cooling systems. It serves publicly traded railroads; leasing companies; manufacturers of original equipment, including locomotives and freight cars; and utilities. The Transit segment manufactures and services components for new and existing passenger transit vehicles, such as regional trains, high speed trains, subway cars, light-rail vehicles, and buses; refurbishes subway cars; and provides heating, ventilation, and air conditioning equipment, as well as doors for buses and subways. This segment serves public transit authorities and municipalities, leasing companies, and manufacturers of subway cars and buses. It also provides electronically controlled pneumatic braking products; railway electronics; freight car trucks; draft gears, couplers, and slack adjusters; air compressors and dryers; heat exchangers and cooling products; and track and switch products. In addition, the company offers railway braking equipment and related components; friction products; new switcher locomotives; transit locomotive and car overhaul services; and freight locomotive overhaul, modernizations, and refurbishment services. Further, it provides platform screen doors; pantographs; window assemblies; couplers; accessibility lifts and ramps for buses and subway cars; and traction motors. The company was founded in 1869 and is headquartered in Pittsburgh, Pennsylvania.
How the Company Makes MoneyWabtec generates revenue through the sale of its diverse range of products and services to the freight rail and transit industries. The company's key revenue streams include the manufacturing and sale of locomotives and freight cars, as well as aftermarket services such as maintenance, repair, and parts replacement. Additionally, Wabtec earns income from its digital solutions, which offer advanced analytics and monitoring for rail operations, helping customers optimize performance and reduce costs. The company also engages in significant partnerships and long-term contracts with major rail operators and government entities, which contribute to its stable revenue base.

Westinghouse Air Brake Technologies Financial Statement Overview

Summary
Westinghouse Air Brake Technologies exhibits strong financial health with consistent growth in revenue and profitability. The balance sheet is solid, with manageable leverage and strong equity. Cash flow performance is impressive, ensuring the company can sustain operations and invest in growth.
Income Statement
85
Very Positive
Westinghouse Air Brake Technologies has demonstrated strong revenue growth, with a 7.2% increase in the most recent year. Gross profit and net profit margins have improved significantly, with the net profit margin reaching 16.9%. EBIT and EBITDA margins are solid, indicating efficient operations and a strong ability to generate earnings.
Balance Sheet
78
Positive
The company maintains a moderate debt-to-equity ratio, reflecting a balanced approach to leveraging. The return on equity has improved, indicating effective use of shareholder funds. The equity ratio is healthy, suggesting a strong capital structure with a significant portion of financing from equity.
Cash Flow
82
Very Positive
Operating cash flow is strong, outpacing net income, which suggests high-quality earnings. Free cash flow growth is robust, with a notable increase in the latest year. The company effectively converts its earnings into cash, demonstrating strong liquidity and financial flexibility.
Breakdown
Dec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income StatementTotal Revenue
10.39B9.68B8.36B7.82B7.56B
Gross Profit
3.37B2.94B2.29B2.13B1.90B
EBIT
1.61B1.27B1.06B954.00M859.50M
EBITDA
1.61B1.79B1.52B1.41B1.23B
Net Income Common Stockholders
1.06B815.00M633.00M558.00M414.00M
Balance SheetCash, Cash Equivalents and Short-Term Investments
715.00M620.00M541.00M473.00M598.70M
Total Assets
18.70B18.99B18.52B18.45B18.45B
Total Debt
3.98B4.38B4.00B4.06B3.79B
Net Debt
3.27B3.76B3.46B3.58B3.19B
Total Liabilities
8.57B8.46B8.37B8.21B8.30B
Stockholders Equity
10.09B10.49B10.10B10.20B10.12B
Cash FlowFree Cash Flow
1.63B1.01B889.00M943.00M647.30M
Operating Cash Flow
1.83B1.20B1.04B1.07B783.70M
Investing Cash Flow
-343.00M-492.00M-235.00M-540.00M-155.40M
Financing Cash Flow
-1.37B-633.00M-708.00M-653.00M-619.00M

Westinghouse Air Brake Technologies Technical Analysis

Technical Analysis Sentiment
Negative
Last Price160.95
Price Trends
50DMA
189.01
Negative
100DMA
193.15
Negative
200DMA
181.58
Negative
Market Momentum
MACD
-0.85
Negative
RSI
47.71
Neutral
STOCH
36.46
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For WAB, the sentiment is Negative. The current price of 160.95 is below the 20-day moving average (MA) of 181.10, below the 50-day MA of 189.01, and below the 200-day MA of 181.58, indicating a bearish trend. The MACD of -0.85 indicates Negative momentum. The RSI at 47.71 is Neutral, neither overbought nor oversold. The STOCH value of 36.46 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for WAB.

Westinghouse Air Brake Technologies Risk Analysis

Westinghouse Air Brake Technologies disclosed 30 risk factors in its most recent earnings report. Westinghouse Air Brake Technologies reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks

Westinghouse Air Brake Technologies Peers Comparison

Overall Rating
UnderperformOutperform
Sector (62)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
UNUNP
78
Outperform
$134.23B20.2042.60%2.49%0.54%6.06%
NSNSC
74
Outperform
$47.72B18.2319.34%2.56%-0.27%43.87%
GBGBX
72
Outperform
$1.43B7.8913.71%2.63%-9.47%69.11%
TRTRN
70
Neutral
$2.05B15.2614.57%4.54%3.21%29.59%
WAWAB
69
Neutral
$27.50B26.6410.26%0.53%7.34%32.91%
62
Neutral
$7.26B12.383.01%3.40%3.58%-14.13%
47
Neutral
$95.30M156.43%55.84%-159.47%
* Industrials Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
WAB
Westinghouse Air Brake Technologies
160.95
12.20
8.20%
RAIL
Freightcar America
4.64
0.77
19.90%
GBX
Greenbrier
45.61
-7.29
-13.78%
NSC
Norfolk Southern
210.93
-33.85
-13.83%
TRN
Trinity Industries
25.09
-1.79
-6.66%
UNP
Union Pacific
213.26
-21.75
-9.25%

Westinghouse Air Brake Technologies Earnings Call Summary

Earnings Call Date: Feb 12, 2025 | % Change Since: -22.56% | Next Earnings Date: Apr 23, 2025
Earnings Call Sentiment Neutral
Wabtec's earnings call reflects a robust annual performance with notable growth in key international markets and successful digital intelligence initiatives. However, challenges such as declining railcar demand in North America and softness in the digital market temper the positive outlook.
Highlights
Strong Annual Performance
Wabtec delivered a strong annual performance with top line growth of 7%, operating margin expansion of 190 basis points, cash conversion of 117%, and adjusted EPS growth of 28%.
International Market Strength
Wabtec experienced strong international market activity, particularly in core markets such as Latin America, Africa, Asia, and CIS, with significant locomotive orders supporting mining and agricultural growth.
Digital Intelligence Success
Wabtec's Digital Intelligence segment achieved its strongest year for orders, totaling approximately $1 billion, driven by significant international demand and advanced automation train handling solutions.
Integration and Portfolio Optimization
Wabtec achieved $87 million in run rate savings from Integration 2.0 and completed all planned dispositions under its portfolio optimization initiative, enhancing focus and profitability.
Shareholder Value Initiatives
Wabtec increased its dividend by 25% and authorized an additional $1 billion for share repurchases, reflecting strong financial performance and future confidence.
Lowlights
North America Railcar Demand Decline
Demand for new railcars in North America was down compared to 2023, with an industry outlook for 2025 indicating a further decline of nearly 17%.
Services Sales Decline
Services sales declined by 15.9% in the fourth quarter due to the timing of modernizations and overhauls, reversing the growth seen in the third quarter.
Softness in North American Digital Market
The Digital Intelligence segment faced softness in North America, impacting sales, despite strong international demand.
Company Guidance
During Wabtec's Fourth Quarter 2024 Earnings Conference Call, the company provided detailed guidance for 2025, highlighting expectations for mid-single-digit revenue growth and continued margin expansion. Key financial metrics shared included anticipated sales between $10.7 billion and $11 billion, representing a 5% increase at the midpoint from the previous year, and adjusted EPS projected to range from $8.35 to $8.75, reflecting a 13% growth at the midpoint. Additionally, Wabtec aims for cash flow conversion to exceed 90%, despite achieving a remarkable 117% cash conversion in 2024. The company also unveiled a new five-year plan, targeting over 350 basis points of margin improvement, with a focus on integration, portfolio optimization, and leveraging innovative technologies to drive value and efficiency.

Westinghouse Air Brake Technologies Corporate Events

Business Operations and StrategyFinancial Disclosures
Wabtec Highlights Strong Financial Performance and Growth
Positive
Feb 18, 2025

On February 18, 2025, Wabtec released an investor presentation detailing its financial performance and strategic outlook. The presentation highlighted strong financial results, including an achievement of their five-year plan within three years, and emphasized their focus on profitability and growth through various strategic initiatives. The company also addressed potential risks and uncertainties that could impact future performance, emphasizing the resilience of its portfolio and significant recurring revenue base.

Stock BuybackDividendsFinancial Disclosures
Wabtec Reports Strong Q4 2024 Results and 2025 Guidance
Positive
Feb 12, 2025

On February 12, 2025, Wabtec Corporation announced its fourth quarter 2024 results, highlighting a strong financial performance with a 2.3% year-over-year sales increase and substantial cash from operations. The adjusted earnings per share rose by 9.1% compared to the previous year, and the company reported a significant 52.7% increase in cash flow from operations for the full year 2024. Additionally, Wabtec provided its 2025 financial guidance, projecting a 13.1% increase in adjusted EPS at the midpoint. The company also announced a 25% hike in its quarterly dividend and expanded its share buyback authorization by $1 billion, reflecting robust shareholder returns and confidence in future growth.

M&A TransactionsBusiness Operations and Strategy
Wabtec to Acquire Evident for $1.78 Billion
Positive
Jan 14, 2025

On January 14, 2025, Wabtec Corporation announced its definitive agreement to acquire Evident Inspection Technologies for $1.78 billion. Evident, a leader in Non-Destructive Testing and Remote Visual Inspection, will augment Wabtec’s capabilities in the rail, mining, and industrial sectors while broadening its reach into complementary sectors. The acquisition, which is expected to close in the first half of 2025, will double Wabtec’s total addressable market to $16 billion, and is anticipated to be slightly accretive to Adjusted EPS in the first year. This strategic move aligns with Wabtec’s long-term vision to drive innovation, productivity, safety, and reliability in mission-critical assets globally.

Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.