Trailer producer Wabash Nationwide had its debt ranking downgraded by Moody’s for the third time in a yr, nearly to the day, whereas executives on an organization earnings name with analysts a number of days earlier tried to make a case for a turnaround that might begin subsequent yr.
The newest Moody’s transfer, introduced Could 5, is a downgrade of its company household ranking to B3 from B2. Moody’s downgraded Moody’s to B1 on Could 7, 2025 after which to B2 on November 5.
In the meantime, S&P International Scores reduce the Wabash debt ranking to B+ in Could of final yr and B quickly after Moody’s (NYSE: MCO) made its transfer to B2 in November. That newest ranking for Wabash remains to be in impact at S&P International. The B ranking at S&P International Scores (NYSE: SPGI) is taken into account a notch above Wabash’s B3 grade at Moody’s.
The B3 ranking at Moody’s is six notches beneath the cutoff line between funding grade and non-investment grade debt.
‘Very weak’ credit score metrics
“The ranking downgrade displays our expectation that Wabash’s credit score metrics will stay at very weak, unsustainable ranges over the following 12 months,” Moody’s mentioned in its report. “Wabash’s earnings have evaporated and money burn has endured throughout a chronic down cycle in new truck trailer manufacturing as the corporate’s prospects defer investments of their transportation fleets.”
Moody’s mentioned trailer manufacturing at Wabash (NYSE: WNC) ought to enhance sequentially through the yr, although the newest quarterly knowledge continues a protracted slide.
Wabash knowledge on trailers shipped has been declining steadily for a lot of months. It was 5,378 within the first quarter, down from 5,901 within the fourth quarter of 2025. Its current high-water mark was 13,670 within the third quarter of 2022.
Monetary measures have additionally been grim at Wabash. It reported money and money equivalents available at $31.9 million on the finish of 2025. A yr earlier, it was $144.5 million. On the finish of 2022, money and money equivalents had been $58.2 million.
Internet gross sales in its Transportation Options section, which incorporates its truck manufacturing operations, had been $250.1 million within the first quarter of 2026. Sequentially, that’s lower than the $262.9 million within the fourth quarter of 2025.
Within the third quarter of 2022, Transportation Options reported internet gross sales in Transportation Options of $611.8 million.
Wabash’s internet revenue final yr was impacted positively by the settlement of the nuclear verdict it confronted in Missouri. However extra reflective of its operations, the corporate posted a gross revenue of $69.9 million in 2025 for all operations, down from $265 million a yr earlier than. In 2022, gross revenue was $322.7 million.
Firm seeing ‘early stabilization’
In Wabash’s first quarter earnings name, when the corporate posted an working lack of $37.3 million in its Transportation Options section, which incorporates its trailer manufacturing actions, CEO Brent Yeagy acknowledged the poor efficiency however sought to forecast higher days.
“Order patterns had been uneven, asset utilization inconsistent and capital selections throughout the trade had been being evaluated fastidiously,” he mentioned. “On the similar time, we had been inspired by early indicators of stabilization and bettering fundamentals that sometimes precede a broader restoration. Now as we transfer into the second quarter of 2026, each our prospects and our visibility continues to enhance. And it exhibits an surroundings that’s constructing the arrange for a constructive 2027 as spot charges, contract charges, capability and demand, all are coming collectively and drive again to alternative demand for tools and probably past as fleets start to plan extra confidently.”
Wabash isn’t adopted intently by fairness analysts; just one was on the earnings name.
Rising backlog
Yeagy mentioned the corporate’s backlog within the quarter was $837 million, which was up 19% from the fourth quarter of 2026. He added it was the best quarter-to-quarter acquire in backlog development for the primary quarter within the firm’s historical past .
Even with an enchancment in market situations, Moody’s mentioned it nonetheless expects Wabash’s debt/EBITDA ratio to be 6X on the finish of 2027 “although trending in a constructive path.” The company mentioned it expects free money movement to stay destructive, “as the corporate’s working capital must help development outweigh the restoration in earnings.”
Moody’s additionally mentioned on the finish of 2023, that ratio was 1X.
The debt situation additionally was raised by way of Wabash’s quick time period wants. Moody’s mentioned Wabash has “ample liquidity to bridge the corporate to what we count on might be a meaningfully improved manufacturing surroundings in 2027.”
Nevertheless it’s going to wish to rely extra on a $350 million asset-based revolving credit score facility, Moody’s mentioned. That ABL expires in September 2027, “which introduces refinancing threat within the near-term.”
Moody’s added that it expects Wabash’s income could be “barely down in 2026, with destructive earnings and free money movement.”
Wabash’s inventory is simply down 9.37% within the final 52 weeks. However the newer tendencies have been brutal: down 17.58% within the final month and 31.55% within the final yr. Based on Yahoo Finance, its five-year price of return exceeds destructive 58%.
Wabash declined touch upon the Moody’s ranking change.
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