Research Update: Westinghouse Air Brake Technologies Upgraded To 'BBB' On Low Leverage And Strong Operating Performance, Outlook Stable

Locomotive and railcar equipment manufacturer Westinghouse Air Brake Technologies Corp. (Wabtec) performed well over the last couple of years, increasing its revenue to $9.7 billion while expanding its S&P Global Ratings-adjusted EBITDA margin to almost 20%. This enabled the company to generate over $1 billion of free operating cash flow (FOCF), which helped it reduce its S&P Global Ratings-adjusted debt to EBITDA to 2.1x. We expect the company to remain around this level of leverage over the next few years. Therefore, we are raising all of our ratings on Wabtec to 'BBB' from 'BBB-'. The stable outlook reflects our expectation that Wabtec will continue to perform well and maintain S&P Global Ratings-adjusted leverage in the 2x-3x range and EBITDA margins

...- Locomotive and railcar equipment manufacturer Westinghouse Air Brake Technologies Corp. (Wabtec) performed well over the last couple of years, increasing its revenue to $9.7 billion while expanding its S&P Global Ratings-adjusted EBITDA margin to almost 20%. This enabled the company to generate over $1 billion of free operating cash flow (FOCF), which helped it reduce its S&P Global Ratings-adjusted debt to EBITDA to 2.1x. We expect the company to remain around this level of leverage over the next few years. - Therefore, we are raising all of our ratings on Wabtec to '###' from '###-'. - The stable outlook reflects our expectation that Wabtec will continue to perform well and maintain S&P Global Ratings-adjusted leverage in the 2x-3x range and EBITDA margins in the 20% area in 2024 while generating strong FOCF. We also expect the company will pursue acquisitions and repurchase shares, though we anticipate it will do so in a manner consistent with its stated financial policy....

Research Update