WAB
Westinghouse Air Brake Technologies Corporation$260.83
Sell
Target $161.87
Report: Mar 07, 2026Industrials • Railroads • Mature CompounderSnapshot
Decision-first overview with recommendation, valuation anchor, and current setup.
Company Overview
Research Snapshot
Price History
Pelican View
Current$260.83-37.9%
Rec: SellConviction: High
Entry Target
N/A
N/A
Fair Value
$161.87
(38% below current)
Stop Loss
N/A
N/A
Position Size
None
Time Horizon
N/A
Key Metrics
Live Snapshot
Market Data
52 Week High$266.27
52 Week Low$151.81
Avg. 3 Month Volume837K
Efficiency
LTM Gross Margin34.1%
LTM EBITDA Margin20.2%
LTM EBIT Margin16.2%
LTM Operating Margin16.1%
LTM ROA5.6%
LTM ROE10.8%
LTM ROIC22.9%
LTM ROCE11.1%
Capital Structure
Market Cap (MM)$42.6B
Enterprise Value (MM)$47.4B
Shares Outstanding170.50M
Total Debt (MM)$5.54B
Cash & Equivalents (MM)$789.00M
LTM Net Debt (MM)$4.75B
LTM Net Debt/EBITDA2.1x
Growth
TTM Rev. Growth7.5%
Last 3-Yr Rev. CAGR10.1%
Last 3-Yr EBITDA CAGR15.7%
Last 3-Yr EPS CAGR25.6%
Valuation
Street Target Price$277.80
LTM EV/Revenue4.2x
LTM EV/Gross Profit12.4x
LTM EV/EBIT26.3x
LTM EV/EBITDA20.9x
LTM P/E36.4x
LTM EV/FCF31.5x
LTM P/FCF28.3x
LTM P/TB5.3x
LTM P/B3.8x
Dividend Yield0.4%
Payout Ratio14.6%
Executive SummarySituation: Current price is $260.83 versus fair value $161.87 (-37.9% expected return), and valuation confidence is stable. Debate: Bull case depends on Launch of the EVO Modernization Program This program targets the aging North American fleet (25% of which is over 20 years old) and is expected to drive significant high-margin services revenue starting in 2026. Bear case centers on Tariff-Driven Cost Inflation Reciprocal tariffs on steel, aluminum, and components from China, Mexico, and Canada threaten to erode gross margins if cost-sharing agreements with customers fail. Conclusion: Recommendation is Sell with no position, pending a materially better risk/reward setup.
Bull Case
Wabtec is a 'hidden' climate play positioned to dominate the multi-decade transition to zero-emission locomotives, supported by a record $27B backlog that provides unprecedented revenue visibility. The 'Integration 3.0' program is expected to drive operating margins toward 20% as high-margin digital services become a larger portion of the mix.
Bear Case
The valuation at 21.8x EV/EBITDA is at a 27% premium to its 5-year average, despite revenue growth slowing to 7.5% and leverage rising. Tariff-driven cost inflation and a shift toward lower-margin equipment builds in North America will compress margins, while the negative tangible book value leaves the stock with no valuation floor in a downturn.
Key Catalysts
Mid-Term (6-18 months)Impact: High
Launch of the EVO Modernization Program This program targets the aging North American fleet (25% of which is over 20 years old) and is expec...
Near-Term (0-6 months)Impact: Moderate
Integration of Dellner Couplers and Evident Acquisitions The successful realization of $115M-$140M in synergies from 'Integration 3.0' would...
Long-Term (18+ months)Impact: Moderate
Wabtec is relevant for analysis now because the stock has reached an all-time high of $266.27, creating a significant disconnect between its...
Primary Risks
Concern: High
Tariff-Driven Cost Inflation Reciprocal tariffs on steel, aluminum, and components from China, Mexico, and Canada threaten to erode gross ma...
Concern: Medium
Moat Erosion from Low-Cost Entrants State-backed competitors like CRRC (China) could undercut WAB's pricing in emerging markets (Africa, Kaz...
Concern: Medium
The stewardship verdict is 'Capable but Unaligned.' While the board possesses deep industrial expertise (e.g., Lee Banks ex-Parker Hannifin)...
Recent Activity
2025-07-24SEC Filing (8-K)
-6.38%Wabtec reported strong 2Q2025 results with GAAP EPS up 19.5% to $1.96 and raised full-year adjusted EPS guidance.
2025-04-23SEC Filing (8-K)
+5.94%Wabtec reports Q1 2025 results with 20.6% adjusted EPS growth and raises full-year guidance.
2025-04-04Market Movement
-7.28%Market/Sector Move -7.28%
2025-02-12SEC Filing (SC 13G)
-9.06%FMR LLC and Abigail P. Johnson report 6.4% beneficial ownership of Westinghouse Air Brake Technologies Corp.
2024-07-24SEC Filing (8-K)
-6.44%Wabtec reports Q2 2024 results with 9.8% sales growth and raises full-year EPS guidance.
Valuation Table
9.5/10Decision Grade
Scenario Range
$144
Bear
$237
Base
$299
Bull
$261