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Woodward Gains 13% in 3 Months: Can the Stock Climb Higher?
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Key Takeaways
Woodward's shares rose 12.9% in 3 months, beating industry growth and S&P 500 declines.
WWD sees strong Aerospace growth from OEM demand and defense activity, lifting fiscal 2026 outlook.
Industrial segment gains from power demand and pricing, though China market volatility remains a risk.
Woodward, Inc.’s (WWD - Free Report) share price has gained 12.9% in the past three months, outpacing the Aerospace -Defense Equipment industry and the S&P 500 composite’s decline of 0.4% and 7.3%, respectively.
Price Performance
Image Source: Zacks Investment Research
WWD fell 2.8% yesterday and closed at $341.52. The stock’s 52-week high and low are $403.31 and 146.82, respectively.
WWD is trading above its 100-day moving average, indicating robust upward momentum and price stability, despite short-term volatility.
Can the stock climb higher? Let us deep dive into WWD’s pros and cons and ascertain the best action for your portfolio.
Several Tailwinds Favor WWD’s Prospects
Strength in Aerospace is driving top-line expansion for Woodward, along with the core industrial segment. Revenues from Woodward’s Aerospace business are expected to improve in the upcoming quarters, driven by strength in the commercial OEM as well as higher defense activity, despite supply-chain challenges. In the last reported quarter, commercial OEM and defense OEM sales were up 22% and 23%, respectively. OEM sales supported by pricing tailwinds like JDAM.
WWD is witnessing strong growth across its defense portfolio, including a considerably higher smart defense order activity. Geopolitical developments are driving higher demand in the defense vertical. For fiscal 2026, Woodward projects its Aerospace segment to grow 15% to 20% compared with the earlier projection of 9% to 15%. In the first quarter of fiscal 2026, net sales for the segment were up 29% year over year.
Woodward’s Industrial business segment has been gaining from solid demand for power generation and the continued requirement for primary and backup power for data centers. Higher investment in gas-powered generation to support grid stability is another tailwind. Increasing demand for alternative fuels across the marine industry, as well as momentum in the global marine market brought on by higher utilization, bodes well.
For fiscal 2026, the Industrial segment is anticipated to increase 11% to 14% compared with the prior expectation of 5% to 9%. In the first quarter of fiscal 2026, the Industrial segment’s net sales totaled $362 million, up 30% year over year. Core industrial sales, excluding the China on-highway impact, rose 22%. Transportation sales rose 55%, and oil and gas sales increased 28%. Power generation grew a modest 7%, reflecting the sale of the combustion business in the prior year.
Favorable mix and strong pricing are holding up margin performance. Both Aerospace and Industrial segments’ margins improved 420 basis points (bps) and 410 bps to 23.4% and 18.5%, respectively.
Further, strong free cash flow provides ample flexibility to carry on expansion as well as prioritize shareholder returns. Woodward generated $70 million in free cash flow in the last reported quarter and expects $300-$350 million for the fiscal year.
In the fiscal first quarter, the company returned $146 million to its shareholders in the form of $17 million of dividends and $129 million worth of share repurchases. For fiscal 2026, the company still expects to return between $650 million and $700 million to shareholders via dividends and share repurchases.
Nonetheless, management expects commercial services revenues to normalize owing to tougher comps, as the elevated spare LRU sales in the previous quarter cannot repeat.
Volatile China on-highway natural-gas truck market, global macroeconomic weakness and rising costs are concerns. The China on-highway business has delivered inconsistent performance, marked by limited order visibility and pronounced quarter-to-quarter volatility. In fiscal 2025, the Industrial segment’s earnings were $183 million, down from $230 million in the prior year.
Due to its unpredictable operating environment and uneven contribution to revenues and profitability, management has elected to wind down the business by the end of the fiscal year. This decision will entail $20-$25 million in restructuring and exit-related costs, largely stemming from employee-related expenses, contract cancellations and inventory write-downs.
WWD Trades at a Discount
WWD stock is trading at a discount, with a forward 12-month Price/Earnings of 37.11X compared with the industry’s 42.39X, making it an attractive investment opportunity.
Image Source: Zacks Investment Research
How to Strategize Investment in WWD Stock?
At present, WWD sports a Zacks Rank #1 (Strong Buy).
WWD’s momentum in Aerospace and core Industrial segments, along with discounted valuation and shareholder returns, makes it an attractive investment for the long term.
The Zacks Consensus Estimate for ATI’s 2026 EPS is $4.18, unchanged over the past seven days. ATI’s earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, with the average surprise being 11.2%. Its shares have gained 157.6% in the past year.
The Zacks Consensus Estimate for Elbit Systems’ 2026 earnings is pinned at $14.65 per share, up 7 cents in the past seven days. ELST’s earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, with the average surprise being 17.4%. Its shares have gained 110.9% in the past year.
The Zacks Consensus Estimate for ATRO’s 2026 EPS is pegged at $2.62, unchanged in the past seven days. Astronics earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, with the average surprise being 31.7%. Its shares have gained 151.9% in the past year.
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Woodward Gains 13% in 3 Months: Can the Stock Climb Higher?
Key Takeaways
Woodward, Inc.’s (WWD - Free Report) share price has gained 12.9% in the past three months, outpacing the Aerospace -Defense Equipment industry and the S&P 500 composite’s decline of 0.4% and 7.3%, respectively.
Price Performance
Image Source: Zacks Investment Research
WWD fell 2.8% yesterday and closed at $341.52. The stock’s 52-week high and low are $403.31 and 146.82, respectively.
WWD is trading above its 100-day moving average, indicating robust upward momentum and price stability, despite short-term volatility.
Can the stock climb higher? Let us deep dive into WWD’s pros and cons and ascertain the best action for your portfolio.
Several Tailwinds Favor WWD’s Prospects
Strength in Aerospace is driving top-line expansion for Woodward, along with the core industrial segment. Revenues from Woodward’s Aerospace business are expected to improve in the upcoming quarters, driven by strength in the commercial OEM as well as higher defense activity, despite supply-chain challenges. In the last reported quarter, commercial OEM and defense OEM sales were up 22% and 23%, respectively. OEM sales supported by pricing tailwinds like JDAM.
WWD is witnessing strong growth across its defense portfolio, including a considerably higher smart defense order activity. Geopolitical developments are driving higher demand in the defense vertical. For fiscal 2026, Woodward projects its Aerospace segment to grow 15% to 20% compared with the earlier projection of 9% to 15%. In the first quarter of fiscal 2026, net sales for the segment were up 29% year over year.
Woodward’s Industrial business segment has been gaining from solid demand for power generation and the continued requirement for primary and backup power for data centers. Higher investment in gas-powered generation to support grid stability is another tailwind. Increasing demand for alternative fuels across the marine industry, as well as momentum in the global marine market brought on by higher utilization, bodes well.
For fiscal 2026, the Industrial segment is anticipated to increase 11% to 14% compared with the prior expectation of 5% to 9%. In the first quarter of fiscal 2026, the Industrial segment’s net sales totaled $362 million, up 30% year over year. Core industrial sales, excluding the China on-highway impact, rose 22%. Transportation sales rose 55%, and oil and gas sales increased 28%. Power generation grew a modest 7%, reflecting the sale of the combustion business in the prior year.
Favorable mix and strong pricing are holding up margin performance. Both Aerospace and Industrial segments’ margins improved 420 basis points (bps) and 410 bps to 23.4% and 18.5%, respectively.
Woodward, Inc. Price, Consensus and EPS Surprise
Woodward, Inc. price-consensus-eps-surprise-chart | Woodward, Inc. Quote
Further, strong free cash flow provides ample flexibility to carry on expansion as well as prioritize shareholder returns. Woodward generated $70 million in free cash flow in the last reported quarter and expects $300-$350 million for the fiscal year.
In the fiscal first quarter, the company returned $146 million to its shareholders in the form of $17 million of dividends and $129 million worth of share repurchases. For fiscal 2026, the company still expects to return between $650 million and $700 million to shareholders via dividends and share repurchases.
Nonetheless, management expects commercial services revenues to normalize owing to tougher comps, as the elevated spare LRU sales in the previous quarter cannot repeat.
Volatile China on-highway natural-gas truck market, global macroeconomic weakness and rising costs are concerns. The China on-highway business has delivered inconsistent performance, marked by limited order visibility and pronounced quarter-to-quarter volatility. In fiscal 2025, the Industrial segment’s earnings were $183 million, down from $230 million in the prior year.
Due to its unpredictable operating environment and uneven contribution to revenues and profitability, management has elected to wind down the business by the end of the fiscal year. This decision will entail $20-$25 million in restructuring and exit-related costs, largely stemming from employee-related expenses, contract cancellations and inventory write-downs.
WWD Trades at a Discount
WWD stock is trading at a discount, with a forward 12-month Price/Earnings of 37.11X compared with the industry’s 42.39X, making it an attractive investment opportunity.
Image Source: Zacks Investment Research
How to Strategize Investment in WWD Stock?
At present, WWD sports a Zacks Rank #1 (Strong Buy).
WWD’s momentum in Aerospace and core Industrial segments, along with discounted valuation and shareholder returns, makes it an attractive investment for the long term.
Other Stocks to Consider in the Same Space
Stocks worth consideration within the same space are ATI Inc (ATI - Free Report) , Elbit Systems Ltd. (ESLT - Free Report) and Astronics Corporation (ATRO - Free Report) . Each stock carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for ATI’s 2026 EPS is $4.18, unchanged over the past seven days. ATI’s earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, with the average surprise being 11.2%. Its shares have gained 157.6% in the past year.
The Zacks Consensus Estimate for Elbit Systems’ 2026 earnings is pinned at $14.65 per share, up 7 cents in the past seven days. ELST’s earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, with the average surprise being 17.4%. Its shares have gained 110.9% in the past year.
The Zacks Consensus Estimate for ATRO’s 2026 EPS is pegged at $2.62, unchanged in the past seven days. Astronics earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, with the average surprise being 31.7%. Its shares have gained 151.9% in the past year.