On Friday, Truist Securities updated their assessment of Curtiss-Wright (NYSE:CW) shares, increasing the price target to $333.00 from the previous $304.00. The firm maintained its Hold rating on the stock, following the company's third-quarter earnings report.
The aerospace and defense manufacturer outperformed expectations in the third quarter of 2024, with results bolstered by factors such as advanced orders and timing. Despite the earnings beat, the company's guidance for the rest of the year was raised, but not to the extent of the third-quarter performance.
Curtiss-Wright's general industrial and process sectors experienced some challenges, but these were counterbalanced by the robust performance of its defense electronics segment and the company's overall strong execution. Moreover, the commercial nuclear industry has seen a positive shift in sentiment due to recent developments. However, management's long-term revenue targets for 2028 and 2035 remain unchanged.
The analyst noted that while there are positive aspects to Curtiss-Wright's recent performance, the time frame for a significant revision of earnings estimates driven by commercial nuclear activities is still several years away. As a result, the firm finds it difficult to recommend purchasing shares of Curtiss-Wright at the current market levels, despite the raised price target.
In other recent news, Curtiss-Wright Corporation reported encouraging financial results for Q3 of 2024, with a 10% year-over-year sales increase to nearly $800 million, primarily fueled by significant growth in the Defense Electronics and Naval & Power segments.
The company's operating income and margins also improved, marking a 17% increase in diluted EPS and a 19% rise in free cash flow. The order book expanded by 2%, reaching a record backlog of $3.3 billion, prompting Curtiss-Wright to raise its full-year 2024 guidance. They now anticipate sales growth of 7% to 9% and diluted EPS growth of 12% to 15%.
These recent developments are a testament to the company's robust market position. Analysts from various firms have noted the company's strategic investments and partnerships, particularly in the commercial nuclear and defense sectors, as key drivers of this growth. The upcoming Ultra Energy acquisition, set to close in Q4, and a completed $100 million share buyback also bolster the company's positive long-term outlook.
However, it's worth noting that the company anticipates a sequential decline in naval defense revenues in Q4 due to timing issues, and a downgrade in the general industrial market outlook due to lower off-highway vehicle sales.
Despite these potential headwinds, Curtiss-Wright remains poised for continued growth, backed by a strong demand in tactical communications, naval defense, and increased OEM production sales boosting Commercial Aerospace.
InvestingPro Insights
Curtiss-Wright's recent performance and Truist Securities' updated price target align with several key insights from InvestingPro. The company's P/E ratio of 33.43 and P/E ratio (Adjusted) of 32.09 for the last twelve months as of Q3 2024 reflect its "high earnings multiple" status, as noted in one of the InvestingPro Tips. This valuation suggests investors are pricing in strong future growth expectations, which is consistent with the company's recent earnings beat and raised guidance.
The company's financial health appears robust, with InvestingPro Data showing a revenue growth of 9.42% over the last twelve months and a quarterly revenue growth of 10.3% in Q3 2024. This solid top-line performance supports the analyst's observations about Curtiss-Wright's strong execution and outperformance in certain segments.
An InvestingPro Tip highlights that Curtiss-Wright "has maintained dividend payments for 51 consecutive years," underscoring the company's financial stability and commitment to shareholder returns. This long-term dividend consistency may be particularly appealing to investors in the current market environment.
For readers seeking a more comprehensive analysis, InvestingPro offers 16 additional tips for Curtiss-Wright, providing a deeper understanding of the company's financial position and market performance.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.