Wabtec's EPS Estimates Northbound: Time to Buy WAB Stock?

Core Viewpoint - Wabtec Corporation (WAB) is experiencing positive momentum due to shareholder-friendly initiatives and strong performance in its Freight and Transit segments, with optimistic earnings guidance for 2024 [1][8]. Financial Performance - The Zacks Consensus Estimate for WAB's third-quarter and full-year 2024 earnings per share (EPS) has been revised upward, indicating growth of 9.4% and 26% from 2023 figures [2]. - Wabtec announced a 17.6% increase in its quarterly cash dividend, raising it from 17 cents to 20 cents per share, resulting in an annualized dividend of 80 cents and a yield of 0.47% [3]. - In 2022, Wabtec paid dividends of $111 million and repurchased shares worth $473 million; in 2023, dividends increased to $123 million with share repurchases of $409 million; in the first half of 2024, dividends were $71 million and share repurchases totaled $375 million [4]. Revenue Growth - Wabtec's revenue is benefiting from increased sales in its Freight and Transit segments, with the Freight segment seeing growth in services and components, while the Transit segment is boosted by strong aftermarket and original equipment manufacturing sales [6]. - The Zacks Consensus Estimate for WAB's revenues in the third and fourth quarters of 2024 is projected at $2.64 billion and $2.61 billion, reflecting improvements of 3.6% and 3.2% from 2023, respectively [7]. Earnings Guidance - Management has raised its 2024 EPS guidance to a range of $7.20-$7.50, up from the previous range of $7.00-$7.40, with the Zacks Consensus Estimate of $7.46 falling within this updated range [8]. - Wabtec's full-year revenue guidance remains unchanged at $10.25 billion to $10.55 billion, with the Zacks Consensus Estimate of $10.39 billion also within this range [9]. Stock Performance - Wabtec has a strong earnings surprise history, outperforming the Zacks Consensus Estimate in three of the last four quarters, with an average surprise of 11.83%. The stock has gained 37.2% year-to-date, outperforming its industry and the S&P 500 [10]. - The company's cash and equivalents increased to $595 million at the end of Q2 2024 from $371 million at the end of Q2 2023, while long-term debt decreased to $3.5 billion from $3.4 billion in the same period [12].