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On Tuesday, UBS analyst Gavin Parsons (NYSE:PSN) increased the price target on Woodward (NASDAQ:WWD) to $232 from the previous $216, while maintaining a Buy rating on the company’s shares. According to InvestingPro data, Woodward’s stock has delivered an impressive 38.8% return over the past year, with current analyst targets ranging from $167 to $232. Parsons highlighted that Woodward surpassed expectations in most metrics during the quarter and chose to maintain its guidance. This decision is seen as cautious, especially considering the market’s negative reaction to a minor downward adjustment in the third fiscal quarter of 2024.
Woodward reported revenue increases in five out of seven subsegments. The company’s overall revenue grew by 14.1% in the last twelve months to $3.32 billion, with a healthy gross profit margin of 26.4%. Notably, the aftermarket subsegment saw a 19% rise, while the only miss was in commercial original equipment (OE), which fell by 10%. This decline was attributed to the impact of a strike at Boeing (NYSE:BA). Additionally, Woodward’s Core Industrial segment experienced a 7% growth despite a challenging 24% comparative period.
Parsons pointed out that pricing remains a significant contributor to Woodward’s performance. The company has shifted its focus towards long-term value pricing, moving away from the pre-COVID strategy of inflation/inflation minus. Investments in automation are also paying off, contributing to improved margins.
Furthermore, the China truck market, which was anticipated to have a minimal impact, met expectations. Parsons reaffirmed the positive outlook for Woodward, emphasizing the company’s strong position in the Aerospace sector. Woodward is expected to benefit from favorable margins on OE and increased content in next-generation engines, which is projected to have a long growth trajectory.
The analyst’s reiterated Buy rating reflects confidence in Woodward’s long-term prospects and strategic positioning within its industry. InvestingPro analysis reveals several strengths, including a 52-year track record of consistent dividend payments and strong liquidity position with current ratio of 1.89. For deeper insights into Woodward’s financial health and growth potential, investors can access the comprehensive Pro Research Report, available exclusively on InvestingPro, which covers over 1,400 US stocks with detailed analysis and actionable intelligence.
In other recent news, Woodward, Inc. saw a mixture of developments. The company reported first quarter fiscal year 2025 results that surpassed earnings expectations, with adjusted earnings per share of $1.35, outpacing the analyst estimate of $1.17. However, revenue for the quarter fell slightly short of the consensus estimate, coming in at $773 million, a 2% decrease year over year.
In a separate event, Woodward’s stockholders approved three critical proposals at its 2024 Annual Meeting. The stockholders elected all nominees for the company’s Board of Directors and approved the advisory resolution on executive compensation. Deloitte & Touche LLP was also ratified as the independent registered public accounting firm for the fiscal year ending September 30, 2025.
Adding to these recent developments, Woodward announced an increase in its quarterly cash dividend by 12%, moving from $0.25 to $0.28 per share. This new dividend is set to be distributed to shareholders on record as of February 20, 2025. These developments reflect the company’s ongoing activities and shareholder confidence in its governance and financial health.
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