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Deutsche Bank On Wabtec: ‘Get Aboard This Train’

Courtesy of Benzinga.

Deutsche Bank On Wabtec: 'Get Aboard This Train'

Westinghouse Air Brake Technologies Corp (NYSE: WAB) (also known as Wabtec) a supplier of value-added products and services for rail markets, could achieve its earnings guidance over the coming years that supports a bullish stance on the stock, according to Deutsche Bank.

The Analyst

Deutsche Bank’s Saree Boroditsky upgraded Wabtec from Hold to Buy with a price target lifted from $95 to $105.

The Thesis

Wabtec’s management presented a five-year strategic plan at its investor day in which earnings per share could double from $3.80 in 2018 to more than $7.60 per share by 2022, Boroditsky said in a note. Moreover, operating profit could reach $1 billion and top-line growth of 9 percent could also be seen.

Investor sentiment on the stock remains “relatively negative” with a high short interest, the analyst said. However, the Street is underappreciating Wabtec’s earnings power potential and ability to achieve its guidance for three reasons:

  • Better-than-expected freight volumes over the coming years;
  • A recovery in Freight and margin improvement in Transit; and
  • Potential for incremental upside if the reported transformational deal with GE Transportation becomes a reality.

The analyst’s revised price target of $105 is based on an approximate 2x multiple on expected 2019 earnings per share of $4.67. Boroditsky said investors are encouraged to “get aboard this train.”

Price Action

Shares of Wabtec hit a new 52-week high of $95.53 Monday morning.

Related Links:

Analyst: Wabtech A Buy On Potential GE Synergies

Stifel: Buy ‘Cal Ripken-Like’ Wabtec

Latest Ratings for WAB

Date Firm Action From To
May 2018 Deutsche Bank Upgrades Hold Buy
May 2018 Stifel Nicolaus Maintains Buy Buy
May 2018 KeyBanc Maintains Overweight Overweight

View More Analyst Ratings for WAB


View the Latest Analyst Ratings

Posted-In: Deutsche Bank freight rail rail stocksAnalyst Color Upgrades Price Target Analyst Ratings Best of Benzinga


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