Westinghouse Air Brake Technologies Corp

Strong Q2 and raised 2026 guidance (good + surprising) - Q2 sales: $3.18B, +17.5% YoY (ex-currency +16.6%); adjusted EPS $2.76, +21.6% YoY; GAAP EPS $2.33, +18.9% YoY. - Cash flow from operations: $441M; cash conversion 82%. - Operating leverage: Adjusted operating margin 21.9% (+0.8 pp YoY) and GAAP operating income $600M (+27.1% YoY), despite tariff headwinds and unfavorable mix. - Forecast upgrade: 2026 revenue now ~$12.5B midpoint (+11.5% YoY) and adjusted EPS $10.60–$10.90 (+20% at midpoint), i.e., raised by one percentage point on revenue and +$0.30 on EPS midpoint.

Backlog visibility remains a key pillar of the story (opportunity) - 12-month backlog: +11% YoY (Freight 12-month backlog $6.64B, +10.2%). - Multiyear backlog: > $30B, +42% YoY (Freight multiyear $25.33B, +47.8%). - Management sees this as strongest coverage they’ve had, supporting mid-single-digit revenue growth for the year (and underpinnings for longer-term value creation).

Demand mix: North America rail strength + international momentum, but freight car build still weak (mixed/ongoing challenge) - North America car load traffic +4% in Q2, supporting higher locomotive activity and improving flow-business execution. - International car loads: mixed, but long-term trends remain robust; infrastructure investment is supporting pipelines. - Railcar build outlook for 2026: ~25,000 cars, down 21% vs 2025 (still a headwind for components tied to newbuild volumes). - Transit indicators positive: ridership increasing (e.g., Europe/India) and robust backlogs driven by public investment.