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Woodward stock target raised on strong OEM growth

EditorAhmed Abdulazez Abdulkadir
Published 2024-04-30, 05:52 a/m

On Tuesday, Wells Fargo (NYSE:WFC) adjusted its price target for Woodward (NASDAQ:WWD), a company known for its aerospace and industrial products, from $156.00 to $172.00, maintaining an Equal Weight rating on the stock. The revision follows Woodward's reported year-over-year (YOY) growth in several key areas of its business.

Woodward experienced a substantial increase in its commercial original equipment manufacturer (OEM) business, with a 15% YOY rise, and its aftermarket services grew by 18%. These gains are attributed to higher production rates, increased fleet utilization, and improved price realization. The defense sector also saw growth, with the OEM side up by 4% YOY and the aftermarket services rising by high-teens percentages, benefiting from higher volume and an enhanced supply chain.

The company's performance in China was notably strong, particularly with overhauled (OH) engines, which exceeded expectations by approximately $15 million. Woodward has also provided guidance for the third quarter, projecting $35-40 million, in contrast to a previously minimal contribution.

Price realization across Woodward's segments was close to 8%, indicating a positive financial impact from each segment of the company. This comprehensive growth across the board contributed to Wells Fargo's decision to raise the price target for Woodward's shares.

InvestingPro Insights

Woodward's (NASDAQ:WWD) recent performance has caught the attention of investors and analysts alike, with Wells Fargo revising its price target upwards. To provide additional context, InvestingPro data reveals a market capitalization of $9.11 billion and a Price to Earnings (P/E) ratio of 30.89, which adjusts to a more attractive 23.91 when considering the last twelve months as of Q2 2024. The company's revenue growth is also impressive, boasting a 23.49% increase over the same period.

Delving into InvestingPro Tips, Woodward has demonstrated a commitment to shareholder returns, increasing its dividend for three consecutive years and maintaining dividend payments for an impressive 52 years. Moreover, three analysts have recently revised their earnings estimates upwards for the upcoming period, signaling confidence in the company's financial prospects. For investors seeking additional insights, there are 10 more InvestingPro Tips available, offering a deeper dive into Woodward's financial health and future outlook. Utilize the coupon code PRONEWS24 to receive an extra 10% off a yearly or biyearly Pro and Pro+ subscription and explore these valuable tips.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

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