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Solid Liquidity Boosts Wabtec (WAB) Amid High Capital Expense
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We have recently updated a report on Westinghouse Air Brake Technologies Corporation (WAB - Free Report) .
The company exited the fourth quarter of 2021 with cash and equivalents of $473 million, significantly above the current debt of $2 million. This indicates that the company has enough cash to meet its current debt obligations. Additionally, its current ratio (a measure of liquidity) at the end of the December quarter stood at 1.32, higher than the reading of 1.20 at 2020-end.
Wabtec anticipates 2022 sales in the range of $8.3-8.6 billion. Total sales recorded in 2021 was $7.82 billion. Factors like favorable mining fundamentals, higher railcar build and improved industrial end-markets contributed to the better projection.
Wabtec reports $52 million of capex in the fourth-quarter 2021. For 2021, capex is reported to be $131 million (higher than the projected $120 million). High capital expenses might hurt the company’s already weak bottom line. Due to higher operating expenses (up 12.5% in the fourth quarter), the operating ratio (operating expenses, as a percentage of revenues) deteriorated 170 basis points from the year-ago quarter’s figure to 18.7%.
Some better-ranked stocks in the broader Zacks Transportation sector are J.B. Hunt Transport Services, Inc. (JBHT - Free Report) , Union Pacific Corporation (UNP - Free Report) and Triton International Limited .
The long-term expected EPS (three to five years) growth rate for J.B. Hunt is pegged at 15%. JBHT is benefiting from strong performances across all its segments. While the Dedicated Contract Services (DCS) unit is being aided by fleet-productivity improvement and a rise in average revenue-producing trucks, the Integrated Capacity Solutions (ICS) unit is gaining from favorable customer freight mix as well as higher contractual and spot rates.
JBHT’s measures to reward shareholders are encouraging. Driven by the tailwinds, the stock has increased 34.7% in the past year. J.B. Hunt currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The long-term expected EPS (three to five years) growth rate for Union Pacific is pegged at 10%. With economic activities gaining pace, freight revenues (accounting for a bulk of the top line) are improving. Freight revenues increased 11% year over year in 2021. Segment-wise, freight revenues in 2021 increased 12%, 11% and 11% in the bulk, industrial and premium units, respectively.
Driven by the tailwinds, the stock has increased 17.6% in the past year. UNP currently carries a Zacks Rank #2 (Buy).
The long-term expected EPS (three to five years) growth rate for Triton is pegged at 10%. Gradual increases in trade volumes and container demand bode well for the company. With easing coronavirus-led restrictions in the United States and Europe, the company saw a strong rebound in its business in the third, the fourth of 2020 as well as in each of the four quarters of 2021.
Driven by the tailwinds, the stock has increased 13.6% in the past year. TRTN currently carries a Zacks Rank #2.
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Solid Liquidity Boosts Wabtec (WAB) Amid High Capital Expense
We have recently updated a report on Westinghouse Air Brake Technologies Corporation (WAB - Free Report) .
The company exited the fourth quarter of 2021 with cash and equivalents of $473 million, significantly above the current debt of $2 million. This indicates that the company has enough cash to meet its current debt obligations. Additionally, its current ratio (a measure of liquidity) at the end of the December quarter stood at 1.32, higher than the reading of 1.20 at 2020-end.
Wabtec anticipates 2022 sales in the range of $8.3-8.6 billion. Total sales recorded in 2021 was $7.82 billion. Factors like favorable mining fundamentals, higher railcar build and improved industrial end-markets contributed to the better projection.
Wabtec reports $52 million of capex in the fourth-quarter 2021. For 2021, capex is reported to be $131 million (higher than the projected $120 million). High capital expenses might hurt the company’s already weak bottom line. Due to higher operating expenses (up 12.5% in the fourth quarter), the operating ratio (operating expenses, as a percentage of revenues) deteriorated 170 basis points from the year-ago quarter’s figure to 18.7%.
Zacks Rank & Stocks to Consider
Wabtec currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Some better-ranked stocks in the broader Zacks Transportation sector are J.B. Hunt Transport Services, Inc. (JBHT - Free Report) , Union Pacific Corporation (UNP - Free Report) and Triton International Limited .
The long-term expected EPS (three to five years) growth rate for J.B. Hunt is pegged at 15%. JBHT is benefiting from strong performances across all its segments. While the Dedicated Contract Services (DCS) unit is being aided by fleet-productivity improvement and a rise in average revenue-producing trucks, the Integrated Capacity Solutions (ICS) unit is gaining from favorable customer freight mix as well as higher contractual and spot rates.
JBHT’s measures to reward shareholders are encouraging. Driven by the tailwinds, the stock has increased 34.7% in the past year. J.B. Hunt currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The long-term expected EPS (three to five years) growth rate for Union Pacific is pegged at 10%. With economic activities gaining pace, freight revenues (accounting for a bulk of the top line) are improving. Freight revenues increased 11% year over year in 2021. Segment-wise, freight revenues in 2021 increased 12%, 11% and 11% in the bulk, industrial and premium units, respectively.
Driven by the tailwinds, the stock has increased 17.6% in the past year. UNP currently carries a Zacks Rank #2 (Buy).
The long-term expected EPS (three to five years) growth rate for Triton is pegged at 10%. Gradual increases in trade volumes and container demand bode well for the company. With easing coronavirus-led restrictions in the United States and Europe, the company saw a strong rebound in its business in the third, the fourth of 2020 as well as in each of the four quarters of 2021.
Driven by the tailwinds, the stock has increased 13.6% in the past year. TRTN currently carries a Zacks Rank #2.