On Thursday, Stephens, a financial services firm, raised its price target on Wabtec Corporation (NYSE:WAB), a global provider of equipment, systems, digital solutions, and value-added services for the freight and transit rail sectors. The new price target is set at $180, up from the previous $165, while the firm maintains an Overweight rating on the stock.
The adjustment comes in the wake of Wabtec's updated 2024 revenue guidance, which saw an increase of 2% at the midpoint. Additionally, the company's adjusted earnings per share (EPS) forecast was raised by 7.5% at the midpoint. According to Stephens, this revision suggests that Wabtec is on track to achieve more than 20% adjusted EPS growth for the second consecutive year, despite the current downturn in the freight market.
The firm attributes this performance to strong secular tailwinds that are believed to be supporting the business. The analyst's commentary highlighted the positive outlook for Wabtec, stating, "This implies the second consecutive year of >20% adj. EPS for the company in the midst of a freight market downturn, which we believe is supportive of the strong secular tailwinds in the business and our positive stance on the stock."
Reiterating the Overweight rating, Stephens expressed confidence in Wabtec's continued growth and financial health. The raised price target to $180 reflects the firm's assessment of the company's value and its future prospects in the industry.
InvestingPro Insights
In light of Stephens' recent price target increase for Wabtec Corporation (NYSE:WAB), real-time data from InvestingPro complements the optimistic outlook. Wabtec's market capitalization stands at a robust $28.82 billion, reflecting its significant presence in the rail sector. The company's revenue growth is also notable, with a 15.66% increase over the last twelve months as of Q1 2024, which supports the raised revenue guidance mentioned by Stephens. Additionally, Wabtec's stock has seen a substantial return, with a 63.14% price total return over the past year, aligning with the analyst's positive stance.
InvestingPro Tips highlight that Wabtec's stock is currently trading near its 52-week high, with the price at 97.55% of this peak, and has maintained dividend payments for 30 consecutive years, which may appeal to income-focused investors. The company's moderate level of debt and the significant return over the last week further underscore its financial health and recent market performance. For more detailed analysis and additional InvestingPro Tips, interested readers can visit https://www.investing.com/pro/WAB. There are 13 more tips available on InvestingPro, which can be accessed with a special offer using the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription.
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