Stifel Upgrades WABCO Holdings (WBC) to Buy

Stifel upgraded WABCO Holdings (NYSE: WBC) from Hold to Buy with a price target of $122.00.

Analyst Michael Baudendistel commented, "We are upgrading the shares of WABCO Holdings from Hold to Buy and establishing a 12-month price target of $122 (or 16.0x our 2017 EPS estimate of $7.65). Shares of WBC have underperformed since the company reported its 1Q15 results (-18% return for WBC versus -2% for the S&P 500) which we attribute primarily to deterioration in truck production volumes in emerging markets and the outlook for North American heavy truck production, which has been marred by disappointing Class 8 orders in October and November. When considering which stocks under our transportation equipment coverage are likely to outperform the broader industrial sector in 2016, we recommend WABCO as a high-quality name that is likely to continue to outperform the end markets it serves with relatively little exposure to the North American market (18% of sales) and with greater exposure to Europe (55% of sales) and emerging markets. We believe this positioning is favorable, as 2015 will likely be the peak Class 8 production year domestically (our just-lowered 2016 North American production estimate of 250,000 units represents a 24% y/y decrease), as European markets should still show growth in 2016, and as we believe emerging markets should at least demonstrate relative stability next year as compared to the severe weakness in 2015."

The firm tweaking 2016 and 2017 EPS estimates downward from $6.60 and $7.75 to $6.50 and $7.65, respectively.

For an analyst ratings summary and ratings history on WABCO Holdings click here. For more ratings news on WABCO Holdings click here.

Shares of WABCO Holdings closed at $100.06 yesterday.

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