Now trading at a price of $136.22, Westinghouse has moved -0.6% so far today.
Westinghouse returned gains of 32.5% last year, with its stock price reaching a high of $137.81 and a low of $91.89. Over the same period, the stock outperformed the S&P 500 index by 11.1%. More recently, the company's 50-day average price was $126.77. Westinghouse Air Brake Technologies Corporation provides technology-based locomotives, equipment, systems, and services for the freight rail and passenger transit industries worldwide. Based in Pittsburgh, PA, the large-cap Industrials company has 27,000 full time employees. Westinghouse has offered a 0.5% dividend yield over the last 12 months.
Overview of the Company's Finances:
| 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | |
|---|---|---|---|---|---|---|
| Revenue (MM) | $4,364 | $8,200 | $7,556 | $7,822 | $8,362 | $9,457 |
| Revenue Growth | n/a | 87.92% | -7.85% | 3.52% | 6.9% | 13.09% |
| Gross Margins | 28% | 28% | 28% | 30% | 30% | 30% |
| Operating Margins | 11% | 8% | 10% | 11% | 12% | 13% |
| Net Margins | 7% | 4% | 5% | 7% | 8% | 8% |
| Net Income (MM) | $295 | $327 | $414 | $558 | $633 | $758 |
| Net Interest Expense (MM) | -$112 | -$219 | -$199 | -$177 | -$186 | -$214 |
| Depreciation & Amort. (MM) | $109 | $401 | $473 | $491 | $479 | $491 |
| Earnings Per Share | $1.53 | $1.84 | $2.17 | $2.97 | $3.46 | $4.23 |
| EPS Growth | n/a | 20.26% | 17.93% | 36.87% | 16.5% | 22.25% |
| Diluted Shares (MM) | 193 | 177 | 190 | 188 | 183 | 179 |
| Free Cash Flow (MM) | $221 | $830 | $648 | $943 | $889 | $749 |
| Capital Expenditures (MM) | $93 | $186 | $136 | $130 | $149 | $176 |
| Current Ratio | 2.7 | 1.29 | 1.2 | 1.32 | 1.25 | 1.19 |
| Total Debt (MM) | $3,857 | $4,334 | $4,686 | $4,060 | $4,253 | $4,047 |
| Net Debt / EBITDA | 5.62 | 3.51 | 3.36 | 2.62 | 2.49 | 2.16 |
Westinghouse has rapidly growing revenues and increasing reinvestment in the business and generally positive cash flows. Additionally, the company's financial statements display a strong EPS growth trend and healthy leverage levels. However, the firm has slimmer gross margins than its peers. Finally, we note that Westinghouse has weak operating margins with a positive growth rate and just enough current assets to cover current liabilities, as shown by its current ratio of 1.19.
Westinghouse's Valuation Is in Line With Its Sector Averages:
Westinghouse has a trailing twelve month P/E ratio of 30.3, compared to an average of 22.19 for the Industrials sector. Based on its EPS guidance of $6.73, the company has a forward P/E ratio of 18.8. According to the 23.6% compound average growth rate of Westinghouse's historical and projected earnings per share, the company's PEG ratio is 1.28. Taking the weighted average of the company's EPS CAGR and the broader market's 5-year projected EPS growth rate, we obtain a normalized growth rate of 10.5%. On this basis, the company's PEG ratio is 2.89. This suggests that these shares are overvalued. In contrast, the market is likely undervaluing Westinghouse in terms of its equity because its P/B ratio is 2.36 while the sector average is 4.06. The company's shares are currently trading -45.6% below their Graham number.
There's an Analyst Consensus of Some Upside Potential for Westinghouse:
The 12 analysts following Westinghouse have set target prices ranging from $121.0 to $153.0 per share, for an average of $136.7 with a buy rating. The company is trading -0.4% away from its average target price, indicating that there is an analyst consensus of some upside potential.
Westinghouse has a very low short interest because 1.2% of the company's shares are sold short. Institutions own 90.9% of the company's shares, and the insider ownership rate stands at 1.05%, suggesting a large amount of insider shareholders. The largest shareholder is Vanguard Group Inc, whose 11% stake in the company is worth $2,737,396,366.
