Westinghouse Air Brake Technologies Corporation (WAB) Clearly Signals Buy-Into the Stock: Don’t ignore the signals

Westinghouse Air Brake Technologies Corporation (NYSE: WAB) stock jumped 0.13% on Friday to $87.01 against a previous-day closing price of $86.90. With 0.38 million shares changed hands, the volume of the stock remained lighter than its average volume of 0.93 million shares. During the session, the Railroads company that operates in wider Industrials sector, reached to the highest price of $87.49 whereas the lowest price it dropped to was $86.21. The 52-week range on WAB shows that it touched its highest point at $100.04 and its lowest point at $78.26 during that stretch. It currently has a 1-year price target of $99.50. With its current market cap of 15.97 billion, WAB has annualized dividend of $0.60 while the current yield stands at 0.69%. Beta for the stock currently stands at 1.52.

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Price Performance and Earnings:

Stock performance is one of the indicators that investors use to determine whether they will profit from a stock. The price performance of WAB was up-trending over the past week, with a rise of 0.90%, but this was up by 2.30% over a month. Three-month performance dropped to -2.51% while six-month performance fell -3.87%. The stock gained 5.98% in the past year, while it has lost -5.54% so far this year. A look at the trailing 12-month EPS for WAB yields 3.16 with Next year EPS estimates of 5.50. For the next quarter, that number is 1.22. This implies an EPS growth rate of 36.20% for this year and 12.65% for next year. EPS is expected to grow by 7.30% annually over the next five years; however, over the past five years, the company experienced an annual growth rate of -2.40%.

Float and Shares Shorts:

At present, 184.50 million WAB shares are outstanding with a float of 174.79 million shares on hand for trading. On Apr 28, 2022, short shares totaled 2.18 million, which was 1.19% higher than short shares on Mar 30, 2022. In addition to Mr. Rafael O. Santana as the firm’s CEO, Pres & Director, Mr. John A. Olin serves as its Exec. VP & CFO.

Institutional Ownership:

Through their ownership of 95.41% of WAB’s outstanding shares, institutional investors have majority control over the company. Other institutions hold 54.47% of WAB, in contrast to 39.08% held by mutual funds. Shares owned by individuals account for 16.90%. As the largest shareholder in WAB with 10.08% of the stake, The Vanguard Group, Inc. holds 18,406,102 shares worth 18,406,102. A second-largest stockholder of WAB, Wellington Management Co. LLP, holds 11,965,710 shares, controlling over 6.55% of the firm’s shares. Pzena Investment Management LLC is the third largest shareholder in WAB, holding 9,997,806 shares or 5.47% stake. With a 2.98% stake in WAB, the Vanguard Windsor Funds – Vanguard is the largest stakeholder. A total of 5,441,000 shares are owned by the mutual fund manager. The Vanguard Total Stock Market Index, which owns about 2.80% of WAB stock, is the second-largest Mutual Fund holder. It holds 5,113,848 shares valued at 419.74 million. Vanguard 500 Index Fund holds 2.21% of the stake in WAB, owning 4,042,541 shares worth 331.81 million.

Analysts Ratings:

Reading analyst opinions is an effective way to decide where to invest, and there are several opinions available for WAB since 14 analysts follow the stock currently. There are 7 analysts who recommend BUY ratings, while 0 suggest SELL ratings. Of the remaining analysts, 5 believe that the stock is worth HOLDING, 1 give it an OVERWEIGHT rating, and 1 thinks that it’s UNDERWEIGHT. In the same way, a target price assigned to a stock can also reveal much about its potential. With WAB analysts setting a high price target of $121.00 and a low target of $84.00, the average target price over the next 12 months is $101.45. Based on these targets, WAB could surge 39.06% to reach the target high and fall by -3.46% to reach the target low. Reaching the average price target will result in a growth of 16.6% from current levels.

EPS: Estimates vs Actual

It is also common to use earnings estimates to evaluate a firm’s growth potential and to determine trading strategy. WAB will report FY 2022 earnings on 02/21/2023. Analysts have provided yearly estimates in a range of $5.05 being high and $4.75 being low. For WAB, this leads to a yearly average estimate of $4.89. The earnings surprise of a firm occurs when the actual results change from the consensus earnings estimate. Westinghouse Air Brake Technologies Corporation surprised analysts by $0.01 when it reported $1.13 EPS against a consensus estimate of $1.12. The surprise factor in the prior quarter was $0.01. Based on analyst estimates, the high estimate for the next quarter is $1.29 and the low estimate is $1.19. The average estimate for the next quarter is thus $1.22.

Summary of Insider Activity:

Insiders traded WAB stock several times over the past three months with 6 Buys and 0 Sells. In these transactions, 10,902 shares were bought while 0 shares were sold. The number of buy transactions has increased to 36 while that of sell transactions has risen to 48 over the past year. The total number of shares bought during that period was 152,286 while 285,708 shares were sold.

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