Results: Woodward, Inc. Beat Earnings Expectations And Analysts Now Have New Forecasts

A week ago, Woodward, Inc. (NASDAQ:WWD) came out with a strong set of quarterly numbers that could potentially lead to a re-rate of the stock. It was overall a positive result, with revenues beating expectations by 3.3% to hit US$835m. Woodward reported statutory earnings per share (EPS) US$1.56, which was a notable 17% above what the analysts had forecast. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

Check out our latest analysis for Woodward

Following the latest results, Woodward's nine analysts are now forecasting revenues of US$3.31b in 2024. This would be a modest 3.5% improvement in revenue compared to the last 12 months. Statutory per-share earnings are expected to be US$5.93, roughly flat on the last 12 months. Before this earnings report, the analysts had been forecasting revenues of US$3.25b and earnings per share (EPS) of US$5.38 in 2024. There's been a pretty noticeable increase in sentiment, with the analysts upgrading revenues and making a substantial gain in earnings per share in particular.

It will come as no surprise to learn that the analysts have increased their price target for Woodward 8.6% to US$182on the back of these upgrades. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. The most optimistic Woodward analyst has a price target of US$214 per share, while the most pessimistic values it at US$152. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. It's clear from the latest estimates that Woodward's rate of growth is expected to accelerate meaningfully, with the forecast 7.1% annualised revenue growth to the end of 2024 noticeably faster than its historical growth of 0.4% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 2.3% annually. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Woodward to grow faster than the wider industry.

The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Woodward's earnings potential next year. Pleasantly, they also upgraded their revenue estimates, and their forecasts suggest the business is expected to grow faster than the wider industry. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have estimates - from multiple Woodward analysts - going out to 2026, and you can see them free on our platform here.

It might also be worth considering whether Woodward's debt load is appropriate, using our debt analysis tools on the Simply Wall St platform, here.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.