Strong Growth and Raised Guidance
Wabtec Corporation (WAB) has found itself riding high on the crest of a lucrative wave, largely due to the robust performance of its Freight segment. With an upward revision in its 2023 guidance, the company is looking at sales of $9.50-$9.70 billion, a significant raise from the previous projection of $9.25-$9.50 billion. Adjusted earnings per share are soaring to between $5.80 and $6.00, up from the earlier estimation of $5.50 and $5.80. This optimistic prognosis is enhanced by the foresight of strong cash flow generation with operating cash flow conversion anticipated to exceed 90%.
Segmental Growth Fuels Top-Line Performance
The first nine months of 2023 have seen Wabtec’s top-line performance surge by an impressive 18.1% year over year. This significant leap is mainly attributed to the solid growth experienced across its Freight segment revenues, which shot up by 18.9% year over year during the same time frame. The growth has been substantiated by the robust performance across all product lines, with substantial upticks in Equipment, Digital Electronics, and Services.
The tailwinds have propelled 2023 earnings estimates upward by 1.2% to $5.95 per share in the past 60 days.
Impressive Stock Performance
Wabtec has made a noteworthy mark in the financial arena, carrying a Zacks Rank #2 (Buy). The company’s shares have outperformed with a striking 24.8% gain in the past year, surpassing the 18.8% growth of the industry it belongs to.
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Other Stocks to Consider
For investors eyeing the broader Transportation sector, other top-ranked stocks such as American Airlines Group Inc. (AAL) and SkyWest (SKYW) present compelling opportunities.
American Airlines Group Inc. (AAL)
American Airlines currently holds a Zacks Rank #2. The company has benefited from improved air-travel demand, especially on the domestic front. Notably, its debt-reduction endeavors have been commendable, with a target to reduce its debt by $15 billion by 2025 end, primarily through naturally occurring amortization.
SkyWest (SKYW)
SkyWest presently flaunts a Zacks Rank #1 (Strong Buy). The company’s laudable fleet-modernization efforts and initiatives to reward its shareholders position it favorably in the market. The company’s commitment to rewarding shareholders through buybacks is apparent in its repurchase of 9.6 million shares in the first nine months of 2023.
Investors can delve into the complete list of today’s Zacks #1 Rank stocks here.
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