Courtesy of Benzinga.
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.
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