6 Reasons Why You Should Add Wabtec (WAB) to Your Portfolio
Westinghouse Air Brake Technologies Corporation, operating as Wabtec Corporation (WAB), topline, is benefiting from strength across its Freight segment.
Against this backdrop, let’s look at the factors that make this stock an attractive pick.
What Makes WAB an Attractive Pick?
An Outperformer: A glimpse at the company’s price trend reveals that the stock has had an impressive run on the bourse year to date. Shares of WAB have gained 11.6% so far this year, outperforming the 10.2% surge of the industry it belongs to.
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Solid Zacks Rank: WAB has a Zacks Rank #2 (Buy). Our research shows that stocks with a Zacks Rank #1 (Strong Buy) or 2 offer the best investment opportunities. Thus, the company is a compelling investment proposition at the moment.
Northward Estimate Revisions:The direction of estimate revisions serves as an important pointer when it comes to the price of a stock. Over the past 90 days, the Zacks Consensus Estimate for WAB’s third-quarter 2023 earnings has moved up 7.4% year over year. Over the past 90 days, the Zacks Consensus Estimate for WAB’s 2023 earnings has increased 4.3% year over year.
Positive Earnings Surprise History: WAB has an impressive earnings surprise history. The company delivered an earnings surprise of 3.42% in the last four quarters, on average.
Earnings Expectations: Earnings growth and stock price gains often indicate a company’s prospects. For third-quarter 2023, WAB’s earnings are expected to grow 19.67% year over year. For 2023 and 2024, WAB’s earnings are expected to grow 16.05% and 11.42%, year over year, respectively.
Growth Factors:Wabtec’s top-line performance (up 17.5% year over year in second-quarter 2023) continues to benefit from solid growth across its Freight segment revenues (up 14.6% year over year). Segmental growth was backed by strength across all product lines, with solid growth in Equipment, Digital Electronics and Services. For 2023, Wabtec now expects sales in the $9.25-$9.50 billion range (prior view: $8.7-$9 billion). For 2023, Wabtec anticipates strong cash flow generation with operating cash flow conversion exceeding 90%.
Other Stocks to Consider
Some other top-ranked stocks for investors interested in the Zacks Transportation sector are United Airlines (UAL) and SkyWest, Inc. (SKYW). United Airlines presently sports a Zacks Rank #1, while SkyWest carries a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
United Airlines has an expected earnings growth rate of more than 100% for the current year. UAL delivered a trailing four-quarter earnings surprise of 21.44%, on average.
The Zacks Consensus Estimate for UAL’s current-year earnings has improved 18.9% over the past 90 days. Shares of UAL have soared 31.6% year to date.
SkyWest's fleet-modernization efforts are commendable. A fall in operating expenses is a tailwind for SkyWest. In second-quarter 2023, the metric dipped 2.4% to $693.8 million due to a decline in operating costs. Low operating expenses boost bottom-line results. Shares of SKYW have surged 144.6% year to date.
SKYW delivered a trailing four-quarter earnings surprise of 31.51%, on average.
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