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WABCO (WBC) Signs Deal With Hyundai to Offer Air Disc Brakes

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WABCO Holdings Inc. signed a contract with South Korea-based commercial vehicle manufacturer, Hyundai Motor Company. Per the long-term agreement, WABCO will supply its single-piston air disc brake (ADB) technology, MAXX, for the manufacturing of Hyundai’s new medium-duty trucks, which are expected to start from August 2019.

Using the ADB technology on axles as standard for medium-duty trucks will position Hyundai as the first producer in the South Korean market to adopt the technology. Featured with a new customized brake pad solution, MAXX ADB will decrease the brake noise in Hyundai's new series of medium-duty trucks.

Per management, the contract is in sync with WABCO’s strategy of technology leadership, global expansion and execution excellence. The company is leveraging its local engineering capability, cost-competitive supply chain and market closeness, enabling it to supply inexpensive technologies and customized solutions to local original equipment manufacturers.

Wabco Holdings Inc. Price and Consensus

The company’s MAXX brand consists of best performing range of single-piston ADBs for commercial vehicles. The brakes provide a potential vehicle weight reduction of 100 kilograms, with optimized wheel ends as compared with traditional drum brakes, enabling vehicles to increase fuel efficiency and improve transport payloads.

Price Performance

In the past six months, WABCO’s stock has lost 10%, underperforming the 2.7% decline recorded by the industry it belongs to.

Zacks Rank & Stocks to Consider

Currently, WABCO has a Zacks Rank #3 (Hold). A few better-ranked stocks in the auto space are LKQ Corporation (LKQ - Free Report) , Toyota Motor Corporation (TM - Free Report) and Fox Factory Holding Corporation (FOXF - Free Report) . LKQ Corp and Toyota sport a Zacks Rank #1 (Strong Buy) while Fox Factory carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

LKQ Corp has an expected long-term growth rate of 15%. Shares of the company have gained 2.5% over the past year.

Toyota has an expected long-term growth rate of 5.7%. Shares of the company have risen 19.7% over the past year.

Fox Factory has an expected long-term growth rate of 12.5%. Shares of the company have jumped 43.4% over the past year.

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