NEW YORK (TheStreet) -- WABCO Holdings Inc. (WBC) is up 1.50% to $103.82 on Tuesday. The company, which provides electronic and mechanical products for commercial trucks, was upgraded to "conviction buy" from "buy" at Goldman Sachs (GS).
"We believe Wabco is positioned to structurally improve returns and earnings power in this cycle, driven by $230 million of platform wins, product cost reductions in a low inflation environment, and value-enhancing capital deployment factors that underpin our street high estimates," Goldman analyst Jerry Revich said.
TheStreet Ratings team rates WABCO HOLDINGS INC as a Buy with a ratings score of A. TheStreet Ratings Team has this to say about their recommendation:
"We rate WABCO HOLDINGS INC (WBC) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, notable return on equity, good cash flow from operations and solid stock price performance. We feel these strengths outweigh the fact that the company shows low profit margins."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The revenue growth greatly exceeded the industry average of 17.2%. Since the same quarter one year prior, revenues rose by 20.8%. Growth in the company's revenue appears to have helped boost the earnings per share.
- WBC's debt-to-equity ratio is very low at 0.08 and is currently below that of the industry average, implying that there has been very successful management of debt levels. To add to this, WBC has a quick ratio of 1.98, which demonstrates the ability of the company to cover short-term liquidity needs.
- The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Machinery industry and the overall market, WABCO HOLDINGS INC's return on equity significantly exceeds that of both the industry average and the S&P 500.
- Powered by its strong earnings growth of 615.05% and other important driving factors, this stock has surged by 61.42% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the stock's future course, although almost any stock can fall in a broad market decline, WBC should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Machinery industry. The net income increased by 597.3% when compared to the same quarter one year prior, rising from $59.70 million to $416.30 million.
- You can view the full analysis from the report here: WBC Ratings Report