WAB - A Compounder on Display

Research evidence excerpt

WAB - A Compounder on Display

Airfreight & Surface Transportation

Railroads - Market Overweight

WABTEC (WAB) July 22, 2026

WAB - A Compounder on Display Rating:

Outperform

The Wolfe Byte Price: $290.00

This morning, WAB reported a solid 2Q EPS beat and once again raised its EPS Price Target:

guidance for the year. And with yet another new peak multi-year backlog, the stock $340

rose 10%. We reiterate our Outperform rating. Prior: $309

% Upside:

17.2%

●Large 2Q Beat. WAB reported 2Q EPS of $2.76 vs. Consensus and our estimate View WAB Model

of $2.61. Total revenue increased 17.5% y/y and beat our model by 4%, while View Comp Table

operating margins improved 80bp y/y. Total EBIT beat our model by 6%. And Company Information

following the ~$0.15 beat in 2Q, WAB raised its full-year guidance by $0.30. 52-Week Range $186 - $290

●Another Record Multi-Year Backlog. WAB's multi-year backlog grew 42% Market Cap. (MM) $49,206

Enterprise Value (MM) $55,937

y/y and slightly q/q to a new record of $30.9B including a new $1B order in Shares Out. (MM) 169.7

Australia. Meanwhile, WAB's 12-month backlog increased 11% y/y but slid 1% Avg. Value Traded (MM) $268.22

from the record high in 1Q. This represents a record y/y spread between WAB's Adj. Debt to Cap 29.9% SI% of Float 1.8%

12-month and total backlog and should support continued strong revenue FCF Yield 2.8%

viability the next several years. And with a pick-up in after-market revenue with EV/ EBITDA 16.6x

more Class I rail locos in active service, WAB reported 8.5% organic growth in

2Q, its highest level in 2 years. WAB reiterated its guidance for mid-single digit 300

organic growth this year, but we see upside potential given continued backlog 280

strength if recent rail volume strength continues. 260240