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Woodward (WWD) Surges 61% in One Year: Will the Rally Last?
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Woodward (WWD - Free Report) is continuing its upward trajectory, with a rise of 61.2% in the past year compared with 27.5% and 35.9% growth of the S&P 500 Composite and the sub-industry, respectively.
WWD is a leading designer, manufacturer and service provider of energy control and optimization solutions. The company provides a wide array of products for fuel, combustion, fluid, actuation and electronic applications, which serve the commercial aerospace, business jet, military and energy markets.
Solid financial performance is driving the good run on the trading front. The company’s earnings has beat the Zacks Consensus Estimate in each of the trailing four quarters with an average surprise of 26.1%
With healthy fundamentals and strong growth opportunities, this Zacks Rank #1 (Strong Buy) stock appears to be a solid investment option at the moment.
Apart from a favorable rank, WWD has a Momentum Score of A. Per Zacks’ proprietary methodology, stocks with a combination of a Zacks Rank #1 or 2 (Buy) and a Momentum Score of A or B offer solid investment opportunities.
Image Source: Zacks Investment Research
Factors Driving Growth
Strong end-market demand, price realization, and productivity and efficiency improvements are driving overall performance.
Woodward’s Industrial business segment is gaining from solid demand for power generation, especially in Asia, and continued requirement for backup power for data centers. In the last reported quarter, segmental net sales totaled $338 million, up 20% year over year due to higher demand across transportation and power generation markets, especially on-highway natural gas truck business in China.
Higher demand for alternative fuels across the marine industry, momentum in the global marine market brought on by higher utilization and rising shipbuilding rates are other tailwinds. For fiscal 2024, the Industrial segment revenues are expected to increase in the range of 13-15% compared with the prior guided range of 8-10%.
The Aerospace segment benefits from higher commercial OEM and commercial aftermarket sales due to improving passenger traffic and aircraft utilization. Defense OEM sales also improved on the back of higher ground vehicles. Defense aftermarket sales benefited from supply-chain stabilization and higher output.
The Aerospace segment’s 2024 revenues are now expected to increase in the range of 12-14% compared with the previous guided range of 10-14%.
Headwinds Remain
Volatile China on-highway natural gas truck market, global macroeconomic weakness and rising costs are concerns. Sales for on-highway natural gas trucks in China were $65 million in the second quarter. However, management expects sales in the fiscal third quarter to be between $35 million and $40 million.
Also, with the recent pause by the U.S. government for further LNG export approvals has made the investment scenario of the LNG development market uncertain. Weakness in guided weapons sales is an added headwind.
Estimate Activity
The Zacks Consensus Estimate for WWD’s fiscal 2024 and 2025 revenues is pegged at $3.29 billion and $3.46 billion, indicating growth of 12.9% and 5%, respectively, from the year-ago levels.
The consensus estimate for fiscal 2024 and 2025earnings per share (EPS) is pegged at $5.76 and $6.14, implying a rise of 36.8% and 6.6%, respectively, from the prior-year actuals.
The Zacks Consensus Estimate for fiscal 2024 and 2025 EPS has increased 9% and 6%, respectively, in the past 60 days, reflecting analysts’ optimism.
WWD’s long-term earnings growth rate is pegged at 16.3%.
The Zacks Consensus Estimate for BMI’s 2024 EPS is pegged at $3.89, up 9.9% in the past 60 days. BMI’s earnings beat the Zacks Consensus Estimate in each of the last four quarters, the average surprise being 12.7%. The long-term earnings growth rate is 15.6%. Shares of BMI have risen 39.6% in the past year.
The Zacks Consensus Estimate for Salesforce’s fiscal 2025 EPS is pegged at $9.71. The long-term earnings growth rate is 17.4%. Salesforce’s earnings beat the Zacks Consensus Estimate in each of the last four quarters, the average surprise being 5.1%. Shares of CRM have risen 33.5% in the past year.
The Zacks Consensus Estimate for Descartes’ fiscal 2025 EPS has increased 1.2% in the past 60 days to $1.69. Descartes earnings beat the Zacks Consensus Estimate in two of the last four quarters, while missing in the remaining two quarters, the average surprise being 5.1%. Shares of DSGX have risen 25.6% in the past year.
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Woodward (WWD) Surges 61% in One Year: Will the Rally Last?
Woodward (WWD - Free Report) is continuing its upward trajectory, with a rise of 61.2% in the past year compared with 27.5% and 35.9% growth of the S&P 500 Composite and the sub-industry, respectively.
WWD is a leading designer, manufacturer and service provider of energy control and optimization solutions. The company provides a wide array of products for fuel, combustion, fluid, actuation and electronic applications, which serve the commercial aerospace, business jet, military and energy markets.
Solid financial performance is driving the good run on the trading front. The company’s earnings has beat the Zacks Consensus Estimate in each of the trailing four quarters with an average surprise of 26.1%
With healthy fundamentals and strong growth opportunities, this Zacks Rank #1 (Strong Buy) stock appears to be a solid investment option at the moment.
Apart from a favorable rank, WWD has a Momentum Score of A. Per Zacks’ proprietary methodology, stocks with a combination of a Zacks Rank #1 or 2 (Buy) and a Momentum Score of A or B offer solid investment opportunities.
Image Source: Zacks Investment Research
Factors Driving Growth
Strong end-market demand, price realization, and productivity and efficiency improvements are driving overall performance.
Woodward’s Industrial business segment is gaining from solid demand for power generation, especially in Asia, and continued requirement for backup power for data centers. In the last reported quarter, segmental net sales totaled $338 million, up 20% year over year due to higher demand across transportation and power generation markets, especially on-highway natural gas truck business in China.
Higher demand for alternative fuels across the marine industry, momentum in the global marine market brought on by higher utilization and rising shipbuilding rates are other tailwinds. For fiscal 2024, the Industrial segment revenues are expected to increase in the range of 13-15% compared with the prior guided range of 8-10%.
The Aerospace segment benefits from higher commercial OEM and commercial aftermarket sales due to improving passenger traffic and aircraft utilization. Defense OEM sales also improved on the back of higher ground vehicles. Defense aftermarket sales benefited from supply-chain stabilization and higher output.
The Aerospace segment’s 2024 revenues are now expected to increase in the range of 12-14% compared with the previous guided range of 10-14%.
Headwinds Remain
Volatile China on-highway natural gas truck market, global macroeconomic weakness and rising costs are concerns. Sales for on-highway natural gas trucks in China were $65 million in the second quarter. However, management expects sales in the fiscal third quarter to be between $35 million and $40 million.
Also, with the recent pause by the U.S. government for further LNG export approvals has made the investment scenario of the LNG development market uncertain. Weakness in guided weapons sales is an added headwind.
Estimate Activity
The Zacks Consensus Estimate for WWD’s fiscal 2024 and 2025 revenues is pegged at $3.29 billion and $3.46 billion, indicating growth of 12.9% and 5%, respectively, from the year-ago levels.
The consensus estimate for fiscal 2024 and 2025earnings per share (EPS) is pegged at $5.76 and $6.14, implying a rise of 36.8% and 6.6%, respectively, from the prior-year actuals.
The Zacks Consensus Estimate for fiscal 2024 and 2025 EPS has increased 9% and 6%, respectively, in the past 60 days, reflecting analysts’ optimism.
WWD’s long-term earnings growth rate is pegged at 16.3%.
Other Stocks to Consider
Some other top-ranked stocks worth consideration in the broader technology space are Badger Meter (BMI - Free Report) , Salesforce (CRM - Free Report) and The Descartes Systems Group Inc (DSGX - Free Report) . While BMI sports a Zacks Rank #1, CRM and DSGX carry a Zacks Rank of 2 each, at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for BMI’s 2024 EPS is pegged at $3.89, up 9.9% in the past 60 days. BMI’s earnings beat the Zacks Consensus Estimate in each of the last four quarters, the average surprise being 12.7%. The long-term earnings growth rate is 15.6%. Shares of BMI have risen 39.6% in the past year.
The Zacks Consensus Estimate for Salesforce’s fiscal 2025 EPS is pegged at $9.71. The long-term earnings growth rate is 17.4%. Salesforce’s earnings beat the Zacks Consensus Estimate in each of the last four quarters, the average surprise being 5.1%. Shares of CRM have risen 33.5% in the past year.
The Zacks Consensus Estimate for Descartes’ fiscal 2025 EPS has increased 1.2% in the past 60 days to $1.69. Descartes earnings beat the Zacks Consensus Estimate in two of the last four quarters, while missing in the remaining two quarters, the average surprise being 5.1%. Shares of DSGX have risen 25.6% in the past year.