Truist has adjusted its price target for Woodward (WWD, Financial), elevating it from $267 to $294, while maintaining a Buy rating in anticipation of the upcoming Q2 performance report for Aerospace and Defense sectors. The firm anticipates that tariff challenges will be manageable across both the commercial aerospace and defense markets. SMID cap defense and space stocks are noted to be in a favorable position, currently experiencing a valuation premium of 122% compared to their larger counterparts.
The analysis also highlights a supportive global defense expenditure environment and predicts ongoing strength in the commercial aerospace aftermarket. Additionally, suppliers exposed to OEM are expected to benefit from increased MAX and LEAP production rates.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 8 analysts, the average target price for Woodward Inc (WWD, Financial) is $260.73 with a high estimate of $320.00 and a low estimate of $200.00. The average target implies an upside of 5.86% from the current price of $246.30. More detailed estimate data can be found on the Woodward Inc (WWD) Forecast page.
Based on the consensus recommendation from 11 brokerage firms, Woodward Inc's (WWD, Financial) average brokerage recommendation is currently 2.4, indicating "Outperform" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for Woodward Inc (WWD, Financial) in one year is $172.92, suggesting a downside of 29.79% from the current price of $246.3. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the Woodward Inc (WWD) Summary page.
WWD Key Business Developments
Release Date: April 28, 2025
- Net Sales: $884 million, an increase of 6% year-over-year.
- Adjusted Earnings Per Share (EPS): $1.69, up from $1.62.
- Net Cash Provided by Operating Activities: $112 million for the first half of 2025, down from $144 million.
- Free Cash Flow: $60 million for the first half of 2025, compared to $88 million.
- Debt Leverage: 1.5x EBITDA as of March 31, 2025.
- Capital Returned to Stockholders: $111 million in the first half of 2025, including $79 million in share repurchases and $31 million in dividends.
- Aerospace Segment Sales: $562 million, an increase of 13%.
- Defense OEM Sales: Up 52% in the quarter.
- Commercial Aftermarket Sales: Up 23% in the quarter.
- Commercial OEM Sales: Down 9% due to production ramp issues.
- Aerospace Segment Earnings: $125 million, with margins expanding 240 basis points to 22.2%.
- Industrial Segment Sales: $322 million, a decrease of 5%.
- China On-Highway Sales: $20 million, a $45 million decrease from the prior year.
- Core Industrial Sales: Up 11%, with oil and gas up 21%, transportation up 13%, and power generation up 40%.
- Industrial Segment Earnings: $46 million, with margins at 14.3%.
- 2025 Guidance: Consolidated sales expected between $3.375 billion and $3.5 billion; adjusted EPS between $5.85 and $6.25.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Woodward Inc (WWD, Financial) reported a 6% year-over-year increase in net sales for the second quarter of fiscal year 2025.
- Adjusted earnings per share rose by 4%, indicating steady growth despite challenges in the China on-highway market.
- The aerospace segment achieved record sales, with a 13% increase driven by strong defense OEM sales and commercial aftermarket growth.
- The company successfully delivered the first production Micronet XP advanced gas turbine control system for the US Navy, marking a significant milestone.
- Woodward Inc (WWD) raised the low end of its sales and adjusted EPS guidance for fiscal year 2025, reflecting strong year-to-date performance.
Negative Points
- Industrial segment sales decreased by 5%, primarily due to a significant decline in China on-highway sales.
- Free cash flow for the first half of 2025 was $60 million, down from $88 million in the previous year, mainly due to increased working capital.
- Commercial OEM sales were down 9% due to a measured production ramp following the Boeing work stoppage.
- The company faces potential risks from tariffs and trade tensions, which could impact operations and sales.
- Defense aftermarket sales decreased by 8%, and the company anticipates a slower growth rate in commercial services in the second half of the year.
