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3 Transportation Stocks Worth Buying Following Guidance Raise
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The first-quarter 2024 earnings season is in its final lap as far as transportation stocks are concerned. It is a well-documented fact that stocks belonging to the Zacks Transportation sector have been hit by multiple headwinds like high fuel and labor costs, weak freight demand and fleet-related woes (for the airline players in the sector). Due to these headwinds, the S&P 500 members from the transportation space (all of whom have reported) saw a 6.1% year-over-year decline in first-quarter 2024 earnings per share, per our latest Earnings Preview.
Despite the disappointing scenario with respect to earnings growth, most S&P 500 transportation companies (73.3% per the report) surpassed the Zacks Consensus Estimate for earnings.
In this article, we have discussed three transportation stocks, Westinghouse Air Brake Technologies Corporation (WAB - Free Report) , operating as Wabtec, Alaska Air Group (ALK - Free Report) and Trinity Industries (TRN - Free Report) , that have not only delivered earnings beat in this reporting cycle but also increased their guidance for the current year.
Better-than-expected earnings per share coupled with a guidance lift more often than not leads to stock price appreciation. Long-term investors base their investment decisions on underlying fundamentals rather than solely focusing on the results of a quarter. The decision to increase guidance highlights these companies’ confidence regarding their future operations and prospects. This naturally finds favor with investors.
Coming back to the transportation sector, despite the headwinds mentioned above, WAB, ALK and TRN, have lifted their current-year guidance, in turn, instilling investor confidence. Let's take a closer look.
Wabtec, currently sporting a Zacks Rank #1 (Strong Buy), benefits from solid growth across its Freight and Transit segments. With both segments performing well, WAB exceeded the Zacks Consensus Estimate for earnings by 26.9%. Sales exceeded expectations by 6.2%. Earnings and sales reflected year-over-year growth rates of 47.7% and 13.8%, respectively.
Adding to the bullishness, management lifted its 2024 guidance with respect to not only revenues but also earnings per share. Wabtec now expects sales in the $10.25-$10.55 billion band compared with the earlier guidance of $10.05-$10.35 billion. Adjusted earnings per share are now estimated to be between $7.00 and $7.40 (earlier guidance: $6.50-$6.90). The guidance lift resulted in analysts revising earnings estimates for WAB positively.
Image Source: Zacks Investment Research
Driven by the upbeat air travel demand, Alaska Air, currently sporting a Zacks Rank #1, exceeded the Zacks Consensus Estimate for first-quarter 2024 earnings by 15.6%. Sales beat estimates by 2.4%. Adding to the bullishness, management lifted its 2024 EPS guidance. ALK now expects adjusted earnings per share in the $3.25-$5.25 band. The earlier guidance was in the band of $3-$5 per share. The guidance lift resulted in analysts revising their earnings estimates for ALK positively.
Image Source: Zacks Investment Research
Driven by improvement in railcar demand, Trinity Industries, currently carrying a Zacks Rank #2 (Buy), exceeded the Zacks Consensus Estimate for earnings by 26.9% in first-quarter 2024. The year-over-year earnings growth exceeded 100%. Adding to the bullishness, management lifted its 2024 EPS guidance. TRN now expects adjusted earnings per share in the $1.35-$1.55 band. The earlier guidance was in the band of $1.3-$1.5 per share.
Image: Bigstock
3 Transportation Stocks Worth Buying Following Guidance Raise
The first-quarter 2024 earnings season is in its final lap as far as transportation stocks are concerned. It is a well-documented fact that stocks belonging to the Zacks Transportation sector have been hit by multiple headwinds like high fuel and labor costs, weak freight demand and fleet-related woes (for the airline players in the sector). Due to these headwinds, the S&P 500 members from the transportation space (all of whom have reported) saw a 6.1% year-over-year decline in first-quarter 2024 earnings per share, per our latest Earnings Preview.
Despite the disappointing scenario with respect to earnings growth, most S&P 500 transportation companies (73.3% per the report) surpassed the Zacks Consensus Estimate for earnings.
In this article, we have discussed three transportation stocks, Westinghouse Air Brake Technologies Corporation (WAB - Free Report) , operating as Wabtec, Alaska Air Group (ALK - Free Report) and Trinity Industries (TRN - Free Report) , that have not only delivered earnings beat in this reporting cycle but also increased their guidance for the current year.
Better-than-expected earnings per share coupled with a guidance lift more often than not leads to stock price appreciation. Long-term investors base their investment decisions on underlying fundamentals rather than solely focusing on the results of a quarter. The decision to increase guidance highlights these companies’ confidence regarding their future operations and prospects. This naturally finds favor with investors.
Coming back to the transportation sector, despite the headwinds mentioned above, WAB, ALK and TRN, have lifted their current-year guidance, in turn, instilling investor confidence. Let's take a closer look.
Wabtec, currently sporting a Zacks Rank #1 (Strong Buy), benefits from solid growth across its Freight and Transit segments. With both segments performing well, WAB exceeded the Zacks Consensus Estimate for earnings by 26.9%. Sales exceeded expectations by 6.2%. Earnings and sales reflected year-over-year growth rates of 47.7% and 13.8%, respectively.
Adding to the bullishness, management lifted its 2024 guidance with respect to not only revenues but also earnings per share. Wabtec now expects sales in the $10.25-$10.55 billion band compared with the earlier guidance of $10.05-$10.35 billion. Adjusted earnings per share are now estimated to be between $7.00 and $7.40 (earlier guidance: $6.50-$6.90). The guidance lift resulted in analysts revising earnings estimates for WAB positively.
Image Source: Zacks Investment Research
Driven by the upbeat air travel demand, Alaska Air, currently sporting a Zacks Rank #1, exceeded the Zacks Consensus Estimate for first-quarter 2024 earnings by 15.6%. Sales beat estimates by 2.4%. Adding to the bullishness, management lifted its 2024 EPS guidance. ALK now expects adjusted earnings per share in the $3.25-$5.25 band. The earlier guidance was in the band of $3-$5 per share. The guidance lift resulted in analysts revising their earnings estimates for ALK positively.
Image Source: Zacks Investment Research
Driven by improvement in railcar demand, Trinity Industries, currently carrying a Zacks Rank #2 (Buy), exceeded the Zacks Consensus Estimate for earnings by 26.9% in first-quarter 2024. The year-over-year earnings growth exceeded 100%. Adding to the bullishness, management lifted its 2024 EPS guidance. TRN now expects adjusted earnings per share in the $1.35-$1.55 band. The earlier guidance was in the band of $1.3-$1.5 per share.
You can see the complete list of today’s Zacks #1 Rank stocks here.