On Wednesday, Wolfe Research increased its price target for Curtiss-Wright (NYSE:CW) shares to $320 from the previous target of $307, while maintaining an Outperform rating.
The adjustment follows a strong performance by the company's stock, which closed up approximately 2.1%, surpassing the broader market's gain of 0.3%. Year-to-date, Curtiss-Wright's stock has risen by about 28%, compared to the S&P 500's increase of 11.6%.
The analyst at Wolfe Research highlighted Curtiss-Wright's potential as a mid-cap defense stock with unique investment opportunities in the nuclear sector.
The company's electronics business has reportedly navigated past supply chain issues, setting the stage for margin expansion moving forward. Management's goal to nearly double the firm's organic growth is seen as a central element of Curtiss-Wright's strategy.
The firm's exposure to nuclear power, including small modular reactors (SMRs), is considered an additional aspect that could provide a competitive advantage within the industry.
Wolfe Research also noted the high quality of Curtiss-Wright's earnings, with free cash flow to net income (FCF/NI) conversion rates significantly higher than its peers.
The new price target of $320 is based on a price-to-earnings (P/E) multiple of approximately 27 times, up from the previous multiple of around 26, applied to the company's estimated earnings for the year 2025.
This valuation is deemed reasonable by Wolfe Research when compared to similar companies in the defense sector, taking into account recent growth trends and the potential of Curtiss-Wright's nuclear offerings.
InvestingPro Insights
As Curtiss-Wright (NYSE:CW) continues to demonstrate a strong stock performance, real-time data from InvestingPro offers additional insights into the company's financial health and market position. With a market capitalization of $10.92 billion and a P/E ratio sitting at 29.07, the company trades at a premium relative to its near-term earnings growth. Despite a robust revenue growth of 11.39% over the last twelve months as of Q1 2024, the InvestingPro Tips suggest cautious optimism: Curtiss-Wright has raised its dividend for 7 consecutive years and maintains a steady dividend payout for over half a century, indicating a commitment to shareholder returns.
Investors might also consider the company's recent price movements, with a 1-month price total return of 13.65% and a 1-year price total return of 73.78%, reflecting a significant uptick. The stock is trading near its 52-week high, at 99.63% of the peak price, which could suggest a strong market confidence or hint at overbought conditions, as indicated by the RSI metric in the InvestingPro Tips. With 19 additional tips available on InvestingPro, users can further explore Curtiss-Wright's financials and market trends. For those interested in a deeper analysis, use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription.
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