Locomotive and train car components manufacturer Wabtec (WAB)
has missed revenue expectations for four straight quarters, but it
hasn't done any harm to the sentiment on the stock. These shares are up
more than 60% for the past year and over 100% over the past two years,
as investors continue to play their enthusiasm for a rail infrastructure
build-out in the U.S. and the potential for Wabtec to replicate its
"components on almost every car" market share in North America, in
Europe and Asia.
Wabtec also remains a frustrating company to
evaluate from a valuation perspective. If Wabtec could hold 20% overseas
market share by 2023 in those areas, where it has roughly 50% share in
North America, a fair value above $100 is definitely reasonable. On the
other hand, these shares already trade with significant near-term
expectations, and it could take more than a decade to build significant
share in markets like Russia or China.
Continue here:
Wabtec Remains A Frustrating Mix Of Quality, Opportunity, And Expectations
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