Wabtec's Multi-Year Growth Algorithm Is 'Underappreciated,' Says This Analyst

Raymond James analyst Patrick Tyler Brown initiated coverage of Westinghouse Air Brake Technologies Corp WAB (Wabtec) with an Outperform rating and a price target of $103, implying an upside of 8.4%.
The analyst believes Wabtec’s multi-year growth algorithm is underappreciated owing to a slew of accelerating secular tailwinds, including a substantial runway for locomotive fleet renewal needs and global decarbonization benefits.
Brown suspects early signs of a cyclical recovery in key N.A. freight markets — rising locomotive utilization/railcars in storage declining — should reignite revenue growth into FY23-FY25 off cyclical lows, notably different from the truck machinery cycle.
The analyst appreciates Wabtec’s heightened European exposure and the stock’s historically strong correlation to movements in commodity prices, bears monitoring closely, which he sees a positive risk/reward with the stock trading at ~17x 2023 EPS estimate.
Price Action: WAB shares are trading higher by 0.49% at $95.13 on the last check Thursday.

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