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1. Company Snapshot

1.a. Company Description

Westinghouse Air Brake Technologies Corporation provides technology-based equipment, systems, and services for the freight rail and passenger transit industries worldwide.It operates through two segments, Freight and Transit.The Freight segment manufactures and services components for new and existing freight cars and locomotives; builds new commuter locomotives; rebuilds freight locomotives; supplies railway electronics, positive train control equipment, signal design, and engineering services; and provides related heat exchange and cooling systems.


It serves publicly traded railroads; leasing companies; manufacturers of original equipment, including locomotives and freight cars; and utilities.The Transit segment manufactures and services components for new and existing passenger transit vehicles, such as regional trains, high speed trains, subway cars, light-rail vehicles, and buses; refurbishes subway cars; and provides heating, ventilation, and air conditioning equipment, as well as doors for buses and subways.This segment serves public transit authorities and municipalities, leasing companies, and manufacturers of subway cars and buses.


It also provides electronically controlled pneumatic braking products; railway electronics; freight car trucks; draft gears, couplers, and slack adjusters; air compressors and dryers; heat exchangers and cooling products; and track and switch products.In addition, the company offers railway braking equipment and related components; friction products; new switcher locomotives; transit locomotive and car overhaul services; and freight locomotive overhaul, modernizations, and refurbishment services.Further, it provides platform screen doors; pantographs; window assemblies; couplers; accessibility lifts and ramps for buses and subway cars; and traction motors.


The company was founded in 1869 and is headquartered in Pittsburgh, Pennsylvania.

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1.b. Last Insights on WAB

Negative drivers behind Westinghouse Air Brake Technologies Corporation's recent performance include a decline in investor sentiment due to lingering supply-chain disruptions and inflationary pressures. The company's transportation sector peers, such as UNP and LUV, have also faced headwinds, contributing to a cautious outlook. Additionally, the recent acquisition of Frauscher Sensor Technology Group, while expected to boost Wabtec's Digital Intelligence portfolio, may have created short-term integration challenges. Furthermore, the company's reliance on rail signaling markets may expose it to regulatory risks and market fluctuations.

1.c. Company Highlights

2. Westinghouse Air Brake Technologies Corporation Delivers Strong Q3 2025 Results

Westinghouse Air Brake Technologies Corporation reported a robust third quarter for 2025, with sales reaching $2.9 billion, representing an 8% year-over-year increase driven by growth in both Freight and Transit segments. The company's adjusted EPS was $2.32, surpassing estimates of $2.28 and marking a 16% year-over-year increase. The twelve-month backlog stood at $8.3 billion, up 8.4%, while the multi-year backlog reached an all-time high. Operating margin expansion was slightly better than expected, with GAAP operating income of $491 million and adjusted operating margin of 21%.

Publication Date: Oct -23

📋 Highlights
  • Revenue Growth:: Sales increased to $2.9 billion, up 8% YoY, driven by Freight and Transit segments.
  • Adjusted EPS Surge:: Adjusted EPS rose 16% YoY, reflecting improved profitability.
  • Record Backlog:: Twelve-month backlog hit $8.3 billion (+8.4%) and multi-year backlog reached an all-time high.
  • Kazakhstan Contract:: Secured $4.2 billion locomotive agreement, including 300 units over 10 years.
  • EPS Guidance Raised:: Full-year adjusted EPS guidance raised to $8.85–$9.05 (+18% at midpoint).

Revenue Growth Drivers

Revenue growth was primarily driven by the Freight segment, including the acquisition of Inspection Technologies, and the Transit segment. The company's strong order book, including a significant $4.2 billion agreement with Kazakhstan's National Railway, underpins its revenue visibility. North America traffic was up 1.4% in the quarter, while Westinghouse Air Brake Technologies Corporation's active locomotive fleets were down slightly compared to the prior year.

Order Book and Backlog

The company secured significant orders, including the aforementioned $4.2 billion agreement and a $125 million multi-year agreement for ultra-class drive systems in mining. The total backlog reached an all-time high, with a strong pipeline of opportunities, particularly in mining, driven by demand for ultra-class locomotives. The twelve-month backlog has grown, providing stronger coverage for 2026 than last year.

Margin Expansion and Guidance

Gross margin was positively impacted by operational excellence, favorable timing of price escalation, and integration programs. The company expects margin growth to expand in the fourth quarter. Adjusted EPS guidance was raised to between $8.85 to $9.05, up 18% at the midpoint. Analysts estimate next year's revenue growth at 7.2%.

Valuation Metrics

With a P/E Ratio of 27.95, P/B Ratio of 2.97, and EV/EBITDA of 16.6, the company's valuation appears to be reflecting its growth prospects. The ROE of 11.14% and ROIC of 7.52% indicate a decent return on equity and invested capital, respectively.

Future Outlook

The company is confident in its ability to drive profitable growth, with a strong twelve-month and multi-year backlog providing visibility for growth ahead. The team remains focused on product innovation, disciplined cost management, and partnership with customers. The company expects high single-digit growth for 2026, driven by international markets.

3. NewsRoom

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Wabtec Completes Frauscher Sensor Technology Group Acquisition

Dec -02

Source: zacks.com

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Wabtec Finalizes Frauscher Sensor Technology Group Acquisition

Dec -01

Source: businesswire.com

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Wabtec Q3 Earnings & Revenues Beat Estimates, 2025 EPS View Tweaked

Oct -22

Source: zacks.com

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Compared to Estimates, Wabtec (WAB) Q3 Earnings: A Look at Key Metrics

Oct -22

Source: zacks.com

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Wabtec Reports Third Quarter 2025 Results; Raised And Tightened Adjusted EPS Guidance

Oct -22

Source: businesswire.com

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Wabtec Gears Up to Report Q3 Earnings: Is a Beat in Store?

Oct -20

Source: zacks.com

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Wabtec Declares Regular Quarterly Common Dividend

Oct -16

Source: businesswire.com

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Will Wabtec (WAB) Beat Estimates Again in Its Next Earnings Report?

Oct -16

Source: zacks.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (5.07%)

6. Segments

Freight Segment

Expected Growth: 4.5%

Westinghouse Air Brake Technologies Corporation’s growth is driven by increasing demand for rail safety and efficiency, expansion in emerging markets, and investments in digitalization and innovation, leading to a forecast CAGR of 4.5%.

Transit Segment

Expected Growth: 6.5%

Growing demand for efficient rail transportation, increasing adoption of advanced safety systems, and rising investment in rail infrastructure drive Westinghouse Air Brake Technologies Corporation’s growth in the rail industry.

Corporate Activities and Elimination

Expected Growth: 4.5%

Westinghouse Air Brake Technologies Corporation's corporate expenses, unallocated items and eliminations of intercompany transactions are expected to grow driven by increasing investments in digitalization, expansion into new markets and cost savings initiatives.

7. Detailed Products

Freight Railcars

Designs, manufactures, and services freight railcars for the transportation of goods

Locomotives

Manufactures and services diesel-electric locomotives for freight and passenger rail transportation

Propulsion and Controls

Designs and manufactures propulsion and control systems for rail and industrial applications

Braking Systems

Designs and manufactures braking systems for rail and industrial applications

Signal and Communication Systems

Designs and manufactures signal and communication systems for rail and industrial applications

Rail Services

Provides maintenance, repair, and overhaul services for railcars and locomotives

Digital Solutions

Provides digital solutions for rail and industrial applications, including data analytics and IoT

8. Westinghouse Air Brake Technologies Corporation's Porter Forces

Forces Ranking

Threat Of Substitutes

Westinghouse Air Brake Technologies Corporation operates in a niche market with limited substitutes, but the threat of substitutes is still present due to the increasing competition from other rail industry players.

Bargaining Power Of Customers

The bargaining power of customers is low due to the specialized nature of Westinghouse Air Brake Technologies Corporation's products and services, which limits the ability of customers to negotiate prices.

Bargaining Power Of Suppliers

The bargaining power of suppliers is moderate due to the presence of multiple suppliers in the market, but Westinghouse Air Brake Technologies Corporation's large scale of operations gives it some negotiating power.

Threat Of New Entrants

The threat of new entrants is low due to the high barriers to entry in the rail industry, including significant capital requirements and regulatory hurdles.

Intensity Of Rivalry

The intensity of rivalry is high due to the presence of several established players in the rail industry, leading to intense competition for market share and pricing pressure.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 28.25%
Debt Cost 6.58%
Equity Weight 71.75%
Equity Cost 10.72%
WACC 9.55%
Leverage 39.38%

11. Quality Control: Westinghouse Air Brake Technologies Corporation passed 7 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

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Momentum: 4.0

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Quality: 6.4

Yield: 4.0

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A-Score: 5.1/10

Value: 2.8

Growth: 6.7

Quality: 6.3

Yield: 0.0

Momentum: 6.0

Volatility: 8.7

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

214.95$

Current Price

214.95$

Potential

-0.00%

Expected Cash-Flows