Woodward, Inc. Beat Analyst Estimates: See What The Consensus Is Forecasting For Next Year

There's been a notable change in appetite for Woodward, Inc. (NASDAQ:WWD) shares in the week since its quarterly report, with the stock down 17% to US$152. The result was positive overall - although revenues of US$848m were in line with what the analysts predicted, Woodward surprised by delivering a statutory profit of US$1.63 per share, modestly greater than expected. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

View our latest analysis for Woodward

After the latest results, the eleven analysts covering Woodward are now predicting revenues of US$3.47b in 2025. If met, this would reflect a credible 7.0% improvement in revenue compared to the last 12 months. Per-share earnings are expected to rise 2.2% to US$6.25. Before this earnings report, the analysts had been forecasting revenues of US$3.49b and earnings per share (EPS) of US$6.40 in 2025. So it looks like there's been a small decline in overall sentiment after the recent results - there's been no major change to revenue estimates, but the analysts did make a minor downgrade to their earnings per share forecasts.

It might be a surprise to learn that the consensus price target was broadly unchanged at US$185, with the analysts clearly implying that the forecast decline in earnings is not expected to have much of an impact on valuation. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. The most optimistic Woodward analyst has a price target of US$228 per share, while the most pessimistic values it at US$152. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await Woodward shareholders.

Of course, another way to look at these forecasts is to place them into context against the industry itself. It's clear from the latest estimates that Woodward's rate of growth is expected to accelerate meaningfully, with the forecast 5.6% annualised revenue growth to the end of 2025 noticeably faster than its historical growth of 1.9% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 2.6% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that Woodward is expected to grow much faster than its industry.

The Bottom Line

The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. The consensus price target held steady at US$185, with the latest estimates not enough to have an impact on their price targets.

With that in mind, we wouldn't be too quick to come to a conclusion on Woodward. Long-term earnings power is much more important than next year's profits. We have forecasts for Woodward going out to 2026, and you can see them free on our platform here.

You can also view our analysis of Woodward's balance sheet, and whether we think Woodward is carrying too much debt, for free on our 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com