NEW YORK, July 22, 2026, 13:15 EDT
Shares of Westinghouse Air Brake Technologies Corporation NYSE:WAB rose 10.7% to $291.68 as of 1:07 p.m. EDT Wednesday. The stock reached a high of $295.41. U.S. markets stayed open, with the S&P 500 up 0.18%.
The stock advanced after a robust performance in the second quarter and an increase in full-year outlook. Revenue totaled $3.18 billion and adjusted earnings came in at $2.76 per share, surpassing analysts’ projections of approximately $3.07 billion in revenue and $2.60 per share in adjusted profit.
The market reaction far exceeded the revision in earnings expectations. Wabtec lifted its adjusted EPS guidance midpoint by 2.9% to $10.75. That margin is what caught investors’ attention.
Shares are now valued at 27.1 times the midpoint adjusted EPS based on an initial estimate. Earlier, the shares traded at around 25.2 times the previous midpoint. The implied multiple increased by approximately 7.6%.
The order book illustrates the basis for that rerating. Overall backlog climbed 41.7% to $30.93 billion. Backlog for the next twelve months was up 11.3% at $9.14 billion.
Based on subtraction, an initial estimate indicates approximately 90% of the yearly growth in backlog falls outside the next year. This implies investors valued forward-looking revenue certainty, rather than just 2026 profits.
Wolfe Research’s Scott Group examined the gap, calling it “the biggest spread we’ve ever seen between the two.” Meanwhile, Chief Financial Officer John Olin said coverage was “probably the strongest coverage we’ve had.” Investing.com
The company’s figures highlight the difference.
| Metric | Current figure | Comparison | Change |
|---|---|---|---|
| Second-quarter revenue | $3.179 billion | $2.706 billion in the same period last year | +17.5% |
| Adjusted EPS | $2.76 | $2.27 in the previous year | +21.6% |
| Adjusted operating margin | 21.9% | 21.1% for the prior year | +0.8 point |
| Total backlog | $30.932 billion | $21.828 billion last year | +41.7% |
| Twelve-month backlog | $9.140 billion | $8.210 billion for the previous year | +11.3% |
| 2026 adjusted EPS midpoint | $10.75 | $10.45 as stated in earlier guidance | +2.9% |
The analysis is based on figures reported by the company and Wabtec’s earlier outlook.
Acquisitions accounted for approximately half of the sales increase this quarter. Organic revenue contributed $229 million, while acquisitions brought in $232 million. This division indicates that the outperformance was not entirely due to deals.
Management reported that organic growth of 5.5% in the first half more accurately reflects shipment timing. The company maintains its outlook for mid-single-digit organic growth in the second half.
The adjusted operating margin increased by 0.8 percentage points to reach 21.9%. Operating cash flow surged, increasing to $441 million, more than double the previous amount.
Freight equipment sales climbed 35%, supported by deliveries of locomotives. Services sales declined 4.2% due to a decrease in modernization deliveries. Transit sales were up 18.9%.
Wabtec is projecting full-year revenue between $12.30 billion and $12.60 billion. The company’s adjusted earnings per share outlook remains in the range of $10.60 to $10.90.
Risks: Much of the backlog growth is spread over longer periods, and delivery timelines are subject to change. The company reported $6.57 billion in debt, with quarterly interest costs increasing to $80 million from $46 million. The updated guidance does not include a quantitative reconciliation to GAAP.
The following focus is on conversion. The gains seen on Wednesday factor in the likelihood of over one robust quarter. The market is also pricing in the expectation that long-term orders will be converted at present margins.
