Woodward ( NASDAQ: WWD ) on Monday was rated Outperform in new research coverage by analysts at Credit Suisse. They said the maker of as fuel pumps, electronics and air valves for aircraft and industrial engines is poised to increase earnings with supply-chain improvements.
“We believe that Woodward ( WWD ) is one of the most severely underearning companies within our coverage,” Scott Deuschle, analyst at Credit Suisse, said in February 27 report.
Credit Suisse estimates Woodward’s ( WWD ) EBITDA for 2023 is 27% less than it was in 2019, before the pandemic led to a steep drop in demand for airplane parts. The company’s peers are on track to exceed 2019 EBITDA by an average of about 15%, according to Credit Suisse.
As Woodward ( WWD ) renegotiates long-term agreements with customers in the aerospace and defense industry, the company can make adjustments for the jump in inflation, the report said.
Credit Suisse has a price target of $120 a share for Woodward ( WWD ) based on a valuation method that includes price-to-earnings and discounted cash flow. The key risks include a tight labor market, inflation and the possibility of slower air traffic.
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Woodward rated Outperform in new coverage at Credit Suisse