A Look at Wabtec’s Valuation Following Record $4.2 Billion Kazakhstan Deal and Analyst Upgrade

Westinghouse Air Brake Technologies (NYSE:WAB) just landed a $4.2 billion, multi-year deal with Kazakhstan Temir Zholy, its biggest locomotive order ever. This agreement is strengthening Wabtec’s regional position and expanding its service commitments.

See our latest analysis for Westinghouse Air Brake Technologies.

The big KTZ contract and recent analyst upgrades have put Westinghouse Air Brake Technologies back in the spotlight, with investors rewarding its ambitious moves. Over the past year, the company’s total shareholder return is up about 10%. Longer-term shareholders have seen even stronger gains with a 130% total return over three years and an impressive 214% in five years. Momentum seems to be rebuilding as the business leans into growth initiatives and steady earnings improvements.

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With shares up over 200% in five years and analyst optimism running high, investors have to ask whether Westinghouse Air Brake Technologies is still undervalued or if all this future growth is already reflected in the price.

Most Popular Narrative: 12.5% Undervalued

With the current share price recently closing at $197.87, the prevailing narrative suggests a fair value of $226.13. This anticipates further upside if long-term growth assumptions play out, setting the stage for a closer look at what underpins such confidence in the company’s potential.

Sustained global investment in rail infrastructure and modernization, especially in international markets like Africa, Asia, and Brazil, coupled with increasing passenger transit ridership, is expanding addressable demand for Wabtec's products and services, supporting long-term revenue growth and backlog visibility.

Read the complete narrative.

Curious what ambitious growth blueprint justifies this valuation? The narrative hints at a dramatic expansion in scale and profitability powered by bold assumptions on market demand, margins, and recurring revenues. Discover which projections drive this outlook and what could set this locomotive story apart.

Result: Fair Value of $226.13 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, persistent weakness in North American freight demand and over-reliance on acquisitions could challenge Wabtec's long-term growth outlook if conditions deteriorate further.

Find out about the key risks to this Westinghouse Air Brake Technologies narrative.

Another View: Multiples Suggest Overvaluation

When we look at the price-to-earnings ratio, Westinghouse Air Brake Technologies trades at 29.4x, noticeably above the US Machinery industry average of 24.1x and the peer average of just 20.6x. This is also higher than its estimated fair ratio of 27.5x, which signals the shares are valued on the high side by this measure. Does this premium mean the market expects outsized future gains, or is it a sign that optimism has run too far?

See what the numbers say about this price — find out in our valuation breakdown.

Build Your Own Westinghouse Air Brake Technologies Narrative

If you see things differently or want to dive into the numbers yourself, you can quickly craft your own take in just a few minutes with Do it your way.

A great starting point for your Westinghouse Air Brake Technologies research is our analysis highlighting 2 key rewards and 1 important warning sign that could impact your investment decision.

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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.

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