UPDATE: Goldman Sachs Upgrades WABCO Holdings to Buy on Product Cycle Story

In a report published Monday, Goldman Sachs analyst Jerry Revich upgraded the rating on WABCO Holdings (NYSE: WBC) from Neutral to Buy, and raised the price target from $83.00 to $89.00.

In the report, Goldman Sachs noted, “We upgrade WBC to Buy from Neutral and see 18% upside to our new $89 12-month price target driven by (1) accelerating new product sales ($230 mn in 2013-15E), (2) margin expansion from product cost re-engineering benefits in a low inflation environment, and (3) attractive cyclical risk-reward, particularly in Europe where capital stock is low, compares are favorable, and freight volumes have improved modestly. We raise our 2014-15 EPS estimates by 3% driven by modestly higher European truck volume forecasts. We are also constructive on capital deployment opportunities and forecast stock buybacks equivalent to 6% of market cap per year in 2014-15E.”

WABCO Holdings closed on Friday at $75.64.