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Curtis-Wright Gains on High Growth Prospects Amid Debt Woes

Zacks Equity Research

We recently issued an updated research report on Curtiss-Wright Corporation CW. The company’s adjusted earnings in the fourth quarter of 2018 came in at $1.90 per share, which surpassed the Zacks Consensus Estimate by 8.6%.

Curtis-Wright has been benefiting from increasing worldwide trade activities that are boosting its prospect in the commercial aerospace domain. Also, with the increased adoption of narrow-body jets in the commercial aircraft market, Curtiss-Wright is witnessing higher sales of sensors, actuation systems and surface treatment services.

Meanwhile, the current U.S. administration is in favor of increasing budgetary provisions for the nation’s defense. This, in turn, is likely to benefit defense OEMs like Curtiss-Wright.

What’s Driving the Stock?

Curtiss-Wright, being a leading supplier of COTS and COTS+ solutions, enjoys a buoyant position in the aerospace defense market. In the ground defense market, the company witnesses solid international demand for its turret drive stabilization systems (TDSS). With rapid rise in global threats and nations increasing their defense spending, long-term growth prospects for defense players like Curtiss-Wright seem impressive.

Curtiss-Wright has been supplying the reactor coolant pumps (RCP) for China’s Westinghouse AP1000 reactor design. This is because China plans to expand its nuclear power capabilities significantly through the construction of new nuclear power plants. Evidently, the company’s fourth-quarter results reflected strong power generation market sales, driven by higher revenues from the China Direct AP1000 program.

Estimates for Curtiss-Wright have been revised upward over the past 30 days. Notably, the company’s bottom line exceeded the consensus mark in all of the trailing four quarters, with average of 17.04%.

However, cheap natural gas price may hurt the near-term prospects of nuclear power industry in the United States, which in turn can result into a potential headwind for Curtiss-Wright. Also, the company is subject to interest rate risk, considering its huge debt levels.

Curtiss-Wright Corporation Price and Consensus

 

Curtiss-Wright Corporation Price and Consensus | Curtiss-Wright Corporation Quote

 

Zacks Rank & Stocks to Consider

Curtis-Wright currently carries a Zacks Rank #3 (Hold).

A few better-ranked stocks in the same sector are The Boeing Company BA, Spirit Aerosystems Holdings SPR and Heico Corporation HEI.

While Boeing and Spirit Aerosystems sport a Zacks Rank #1 (Strong Buy), Heico carries a Zacks Rank #2 (Buy). You can see the complete .list of today’s Zacks #1 Rank stocks here.

Boeing came up with average positive earnings surprise of 17.08% in the last four quarters. The Zacks Consensus Estimate for 2019 earnings has risen 11.3% to $20.13 in the past 90 days.

Spirit Aerosystems’ long-term growth estimates currently stand at 7.80%. The Zacks Consensus Estimate for 2019 earnings has risen 3.7% to $7.56 in the past 90 days.

Heico Corporation’s long-term growth estimates currently stand at 12.10%. The Zacks Consensus Estimate for 2019 earnings has risen 5.9% to $2.14 in the past 90 days.

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The Boeing Company (BA) : Free Stock Analysis Report
 
Spirit Aerosystems Holdings, Inc. (SPR) : Free Stock Analysis Report
 
Heico Corporation (HEI) : Free Stock Analysis Report
 
Curtiss-Wright Corporation (CW) : Free Stock Analysis Report
 
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