Boosted by 114% growth and partnerships with Airbus and Rolls-Royce, aerospace and industrial firm Woodward has landed a spot on the IBD Leaderboard watchlist. And after bouncing off its 50-day moving average, WWD stock is now targeting a fresh breakout.
The Israel-Hamas conflict, geopolitical tensions in Iran and Russia, as well as the U.S.-China chip war over Taiwan, have put defense stocks and related exchange-traded funds in focus. ETFs with holdings in WWD stock include SPDR S&P Aerospace & Defense ETF and iShares U.S. Aerospace & Defense ETF.
WWD stock outpaces 98% of all stocks with a 98 Composite Rating. As one of the leading defense stocks to watch, Woodward has delivered five consecutive quarters of accelerating sales growth. In Q2, the company generated a 30% rise to $800.7 million in revenue.
Bottom-line growth has also spiked, jumping 114% compared to the prior-year quarter, to earnings per share of $1.37. For the full year, Wall Street forecasts 52% EPS growth and a 17% increase in 2024.
Showing solid institutional demand, 64 funds with an A+ or A rating from IBD own WWD stock. Plus, Woodward sports a B+ Accumulation/Distribution Rating and a 1.4 up/down volume ratio.
Woodward Teams Up With Airbus, Rolls-Royce
Headquartered in Fort Collins, Colo., Woodward operates in the aerospace and industrial markets.
For the aerospace market, the company provides products for both commercial and military applications. Woodward's key focus areas are propulsion system controls for turbine-powered aircraft, actuation systems and motion controls.
For industrial markets, it provides controls for equipment that produces electricity using conventional or renewable energy sources. It's also involved in controls of power quality, distribution and storage on the electrical grid. Woodward also provides controls for power equipment used in the extraction, distribution and conversion of renewable and fossil fuels in marine, locomotive, and industrial equipment applications.
Through its subsidiary Woodward L'Orange — a German engineering manufacturing company headquartered in Stuttgart — Woodward has partnered with Rolls-Royce and WTZ Rosslau to develop a methanol engine for marine applications.
Aiming to produce low-emission, high-speed combustion engines for ships, the new engine contributes to decarbonization by running on green methanol. The joint venture has received funding from the German Federal Ministry for Economic Affairs and Climate Protection funds "MeOHmare" research project.
At the end of last year, Airbus selected Woodward to provide the Fuel Cell Balance of Plant (BoP) or the ZEROe demonstrator. The ZERO demonstrator aims to put a zero-emission aircraft into service by 2035.
WWD Stock Defends 50-Day Line As Breakout Nears
Woodward is engineering a new flat base showing a 133.85 buy point. The chart pattern is a first-stage base, offering a better chance of success than later-stage consolidations.
Ahead of a potential breakout, the relative strength line for WWD stock has already hit a new high, earning a blue dot in MarketSmith.
The Israel-Hamas conflict and a hot CPI inflation report from the Federal Reserve have put pressure on the market. But Woodward, along with the Nasdaq and S&P 500, are showing resilience Monday to kick off the new week.
Follow Matthew Galgani on X (formerly Twitter) at @IBD_MGalgani.
