Yahoo Finance Westinghouse Air Brake Technologies Corporation Just Beat Earnings Expectations: Here's What Analysts Think Will Happen Next
As you might know, Westinghouse Air Brake Technologies Corporation (NYSE:WAB) just kicked off its latest quarterly results with some very strong numbers. It was overall a positive result, with revenues beating expectations by 4.4% to hit US$2.5b. Westinghouse Air Brake Technologies also reported a statutory profit of US$1.53, which was an impressive 20% above what the analysts had forecast. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.
View our latest analysis for Westinghouse Air Brake Technologies
Taking into account the latest results, the consensus forecast from Westinghouse Air Brake Technologies' twelve analysts is for revenues of US$10.3b in 2024. This reflects a satisfactory 3.5% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to jump 20% to US$6.25. In the lead-up to this report, the analysts had been modelling revenues of US$10.2b and earnings per share (EPS) of US$5.88 in 2024. So the consensus seems to have become somewhat more optimistic on Westinghouse Air Brake Technologies' earnings potential following these results.
The consensus price target rose 8.4% to US$169, suggesting that higher earnings estimates flow through to the stock's valuation as well. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. The most optimistic Westinghouse Air Brake Technologies analyst has a price target of US$209 per share, while the most pessimistic values it at US$133. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await Westinghouse Air Brake Technologies shareholders.
Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. It's pretty clear that there is an expectation that Westinghouse Air Brake Technologies' revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 4.6% growth on an annualised basis. This is compared to a historical growth rate of 7.4% over the past five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 3.5% per year. Even after the forecast slowdown in growth, it seems obvious that Westinghouse Air Brake Technologies is also expected to grow faster than the wider industry.
The Bottom Line
The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards Westinghouse Air Brake Technologies following these results. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time.
Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have estimates - from multiple Westinghouse Air Brake Technologies analysts - going out to 2026, and you can see them free on our platform here.
You still need to take note of risks, for example - Westinghouse Air Brake Technologies has 1 warning sign we think you should be aware of.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
