Wabtec Raises 2026 Earnings Outlook as Margins Expand and Backlog Climbs

Wabtec Corporation has lifted its adjusted earnings guidance for 2026 following third-quarter profit that exceeded analyst projections. The company now projects full-year adjusted earnings of $10.85 to $11.05 per share, up from its previous range of $10.60 to $10.90 per share. The increased midpoint indicates approximately 22% growth year over year. Wabtec kept its 2026 revenue guidance steady at $12.30 to $12.60 billion.

For the third quarter, adjusted earnings per share reached $2.83, exceeding the Zacks Consensus Estimate of $2.72. Sales climbed 8.1% year over year to $3.12 billion, though that fell 2% short of the consensus mark of $3.18 billion. Wabtec attributed the revenue performance to unfavorable currency fluctuations, project schedules, and shifted locomotive deliveries, along with softer railcar builds in North America affecting its Components division.

Operating leverage supported the earnings performance during the quarter. Wabtec's adjusted operating margin rose 190 basis points to 22.9%, while its adjusted gross margin gained 180 basis points to reach 37.4%. Adjusted operating income grew to $715 million from $607 million a year earlier. Management credited cost recovery, manufacturing efficiencies, favorable product mix, and Integration 3.0 savings for mitigating the effects of tariffs and higher raw-material costs.

Revenue visibility continues to be backed by a record order book. Total backlog reached $31.44 billion as of Sept. 30, 2026, marking a 22.9% rise compared to the prior year. Freight backlog climbed to $25.77 billion, Transit backlog stood at $5.67 billion, and the 12-month backlog increased 8.8% to $8.99 billion. Commercial additions included a long-term Material and Technical Support Agreement with Transnet Engineering valued at roughly US$390 million, $1 billion in international locomotive and service deals, and $633 million in North American modernization orders.

Wabtec has also carried out capital management moves, issuing US$500 million of 5.9% Senior Notes due 2037 to refinance debt maturing in November 2026. On November 09, 2026, shares climbed 5.2% to $298.19. Observers at Zacks Investment Research and GuruFocus note that while profitability remains strong, the company's valuation multiple trades at a premium relative to its historical medians and industry peers, leaving execution on deliveries and cost management critical.