Woodward (WWD) Gains 29.9% YTD: Will the Uptrend Continue?
Woodward WWD has witnessed strong momentum this year so far. The shares of the company have gained 29.9% year to date compared with the sub-industry’s growth of 23.3%.
The company 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.
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Catalysts Behind the Price Surge
Let’s delve deeper to unearth the factors working in favor of this Zacks Rank #1 (Strong Buy) stock.
The increase in share price is driven by the company’s robust financial performance. The company came up with an impressive performance in third-quarter fiscal 2023.
The company reported net earnings per share (EPS) of $1.37 for third-quarter fiscal 2023, which beat the Zacks Consensus Estimate by 41.2%. In the year-ago quarter, WWD reported adjusted net earnings of 64 cents. Net sales in the fiscal third quarter moved up 30% year over year to $801 million. Higher sales in the Aerospace and Industrial segments resulted in this uptick. The top line beat the consensus estimate by 14%.
The company’s performance benefits from continued momentum in the Aerospace segment owing to higher commercial OEM and aftermarket sales resulting from improving passenger traffic and fleet utilization.
The Aerospace segment is likely to benefit from a rise in U.S. defense spending due to increasing geopolitical tensions and a minor increase in U.S. defense procurement. Also, the industrial segment is benefiting from solid demand for power generation and continued demand for backup power.
For fiscal 2023, net sales are now expected to be in the band of $2.85-$2.9 billion compared with the earlier guided range of $2.7-$2.8 billion. The Aerospace segment’s 2023 revenues are now anticipated to increase between 16% and 18%, while the Industrial segment’s revenues are expected to climb in the range of 28-30%. Earlier, both segments’ revenues were anticipated to rise between 14% and 19%.
The Zacks Consensus Estimate for fiscal 2023 and 2024 revenues has increased 15.9% and 10.8%, respectively, in the past 60 days, reflecting analysts’ optimism regarding the company’s prospects.
Despite strong demand, continued softness in defense OEM sales due to lower guided weapons sales and supply-chain disruptions are major headwinds. Global macroeconomic weakness, forex volatility and rising costs are added concerns.
Other Stocks to Consider
Some other top-ranked stocks in the broader technology space are Watts Water Technologies WTS, Aspen Technology AZPN and Badger Meter BMI. Badger Meter presently sports a Zacks Rank #1, whereas Watts Water and Aspen Technology currently carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Watts Water’s 2023 EPS has increased 5.8% in the past 60 days to $7.61. The company’s long-term earnings growth rate is 8%.
Watts Water’s earnings beat estimates in all the trailing four quarters, delivering an average surprise of 12.5%. Shares of WTS have rallied 28.3% in the past year.
The Zacks Consensus Estimate for Aspen Technology’s fiscal 2024 EPS has increased 5.8% in the past 60 days to $6.58.
Aspen Technology’s long-term earnings growth rate is 17.1%. Shares of AZPN have declined 10% in the past year.
The Zacks Consensus Estimate for Badger Meter’s 2023 EPS has increased 6.3% in the past 60 days to $2.86.
Badger Meter’s earnings beat the Zacks Consensus Estimate in all the last four quarters, the average being 6.7%. Shares of BMI have surged 63.7% in the past year.
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Badger Meter, Inc. (BMI) : Free Stock Analysis Report
Watts Water Technologies, Inc. (WTS) : Free Stock Analysis Report
Woodward, Inc. (WWD) : Free Stock Analysis Report
Aspen Technology, Inc. (AZPN) : Free Stock Analysis Report
