Woodward is the IBD Stock of The Day for Tuesday as shares close in on a buy point near record highs.
Fort Collins, Colo.-based Woodward makes control and combustion systems and components for aerospace, defense and energy customers. Its products range from flight decks and sensors for business, commercial and military aircraft to industrial diesel and gas engines and turbines.
Woodward averaged 102% earnings growth over the last four quarters. Revenue increased an average 25% during that period. For the company's Q1 results on Jan. 29, Woodward reported a 196% earnings increase to $1.45 per share on 27% revenue growth to $787 million.
Aerospace sales for the quarter increased about 16.5% to $460.76 million. Industrial sales spiked 46% to $325.97 million, driven by its On-Highway (OH) natural gas truck business in China and growth across all its markets.
Hiked Outlook
The company also hoisted its outlook on the results, guiding revenue to range from $3.15 billion to $3.3 billion. That compares to the prior range of $3.1 billion to $3.25 billion. Woodward raised its adjusted earnings forecast to $5 to $5.40 per share, up from the November guidance of $4.75 to $5.20 per share.
Goldman Sachs on Jan. 31 hoisted its price target on Woodward on the results, highlighting the beat-and-raise and performance of the China natural gas truck business. Goldman believes Woodward's OH natural gas truck business has substantial long-term potential, even if the market is uncertain about volatility. The firm also noted the aerospace segment had a 35% incremental margin, with industry growth, market share gains, price and aftermarket services all contributing. Goldman maintained a buy rating on the shares.
Woodward on Feb. 6 announced it ranked 49th out of 100 on the Forbes' list of America's Most Successful Mid-Cap companies in 2024, which is assessed on earnings and sales growth, return on equity and total stock returns. Forbes compiled FactSet data on more than 3,000 companies with market values between $2 billion and $10 billion for the list.
That same day, Barclays lifted its price target on WWD stock to $140 from $134 and maintained an equal weight rating on the shares.
Woodward Stock
Meanwhile, Woodward ranks fourth in the Aerospace/Defense Group, which is led by Brazilian aircraft manufacturer Embraer, according to IBD Stock Checkup.
WWD stock is trading near a 150 buy point for a five-week flat base as part of a base-on-base formation. Shares briefly eclipsed the entry on March 7 and hit a record high 151.30 before easing, MarketSurge charts show. Woodward reclaimed its 10-day moving average on March 15 and has held above that level.
Woodward climbed 68% from its March 2023 lows. Shares advanced nearly 9% so far this year.
WWD stock has a near-perfect 98 Composite Rating out of a best-possible 99. The Composite Rating combines various technical indicators into one easy-to-read score. Woodward has an 85 EPS Rating. The stock's relative strength line is on the upswing since the end of February and it has an 86 RS Rating.
You can follow Harrison Miller for more stock news and updates on X/Twitter @IBD_Harrison
