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1. Company Snapshot

1.a. Company Description

Woodward, Inc.designs, manufactures, and services control solutions for the aerospace and industrial markets worldwide.The company operates through two segments: Aerospace and Industrial.


The Aerospace segment provides fuel pumps, metering units, actuators, air valves, specialty valves, fuel nozzles, and thrust reverser actuation systems for turbine engines and nacelles, and flight deck controls, actuators, servocontrols, motors, and sensors for aircraft.These products are used on commercial and private aircraft and rotorcraft, as well as on military fixed-wing aircraft and rotorcraft, guided weapons, and other defense systems.It also provides aftermarket maintenance, repair and overhaul, and other services to commercial airlines, repair facilities, military depots, third party repair shops, and other end users.


This segment sells its products to original equipment manufacturers (OEMs), tier-one suppliers, and various contractors, as well as through aftermarket sales of components, such as provisioning spares or replacements, and spare parts.The Industrial segment offers actuators, valves, pumps, fuel injection systems, solenoids, ignition systems, speed controls, electronics and software, and sensors.These products are used on industrial gas turbines, steam turbines, compressors, and reciprocating engines.


This segment sells its aftermarket products, and other related services to OEMs through an independent network of distributors, as well as directly to end users.The company was founded in 1870 and is headquartered in Fort Collins, Colorado.

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1.b. Last Insights on WWD

Woodward, Inc.'s recent performance was driven by strong Q1 FY26 earnings, with a 29% sales growth and EPS beat. The company's Aerospace and Industrial segments saw robust demand, leading to a raised full-year outlook. Deutsche Bank upgraded the stock with a buy rating and a $445 price target. The company also announced the sale of its pilot controls product line to Ontic Engineering and Manufacturing. Additionally, Frederico Fleury Curado was elected to the Board of Directors.

1.c. Company Highlights

2. Woodward's Q2 2026 Surge: Record Sales and Margin Expansion

Woodward Inc. shattered expectations in its second‑quarter fiscal 2026 earnings, reporting net sales of $1.02 billion— a 23% year‑over‑year jump that tops the company’s historical high. Adjusted earnings per share climbed to $2.27 from $1.69, while aerospace margins edged up 30 basis points and industrial margins held steady, reflecting a robust mix of high‑margin commercial aircraft and resilient power‑generation demand. Free cash flow hit $38 million, and the company returned $355 million to shareholders via share repurchases and dividends, underscoring a disciplined capital allocation policy.

Publication Date: Apr -30

📋 Highlights
  • Record Sales Growth:: Q2 sales surged 23% YoY to $1.04B, with Aerospace and Industrial segments hitting all-time highs.
  • Earnings Surge:: Adjusted EPS jumped 34% to $2.27, driven by strong demand and margin expansion (Aerospace +30 bps).
  • Free Cash Flow Expansion:: H1 2026 free cash flow reached $60M, with full-year guidance of $300M–$350M despite higher capex ($290M).
  • Strategic Portfolio Moves:: Acquired Valve Research & Manufacturing and sold the Niles pilot controls business, returning $355M to shareholders via buybacks in H1.
  • Guidance Raised:: Full-year sales growth now 20–23% with adjusted EPS of $9.15–$9.45; Aerospace sales growth lifted to 21–24%.

Revenue Drivers

Revenue growth was powered by a 25% rise in aerospace sales, driven by higher commercial aircraft build rates and overlapping maintenance cycles for legacy and new‑generation fleets. Industrial sales grew 20%, with core industrial volumes up 19% thanks to favorable foreign‑currency effects and increased oil‑and‑gas power‑generation orders.

Margin Dynamics

Adjusted EPS growth outpaced revenue, thanks to disciplined cost management and price increases of 6.5–7% across the quarter. Aerospace net margins improved slightly, while industrial margins remained flat, indicating that Woodward’s pricing power is translating into earnings expansion without sacrificing volume.

Capital Allocation & Cash Flow

Capital expenditures are set to rise over the next two quarters, with the Spartanburg plant slated to begin operations in 2027. The company’s valuation reflects its growth trajectory: a P/E of 87.62, P/B of 8.54, and EV/EBITDA of 30.68, while the dividend yield sits at 0.32% and free‑cash‑flow yield at 1.81%. Debt leverage is comfortably low at 1.4x EBITDA.

Strategic Portfolio Moves

Woodward’s portfolio rationalization continues, highlighted by the acquisition of Valve Research & Manufacturing and the divestiture of its pilot‑controls line. These moves sharpen focus on high‑growth single‑aisle aircraft components and streamline operations, positioning the company to capture emerging aftermarket opportunities.

Guidance & Market Outlook

Management raised 2026 guidance, projecting 20–23% total sales growth, adjusted EPS of $9.15–$9.45, and free cash flow of $300–$350 million. The company remains optimistic about aftermarket demand, citing steady spare‑LRU orders amid geopolitical tensions and a resilient core‑industrial margin outlook of 18–18.5% for 2027.

3. NewsRoom

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Woodward's Q2 Earnings & Revenues Beat Estimates, Increase Y/Y

Apr -30

Source: zacks.com

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Woodward (WWD) Reports Q2 Earnings: What Key Metrics Have to Say

Apr -30

Source: zacks.com

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Woodward, Inc. (WWD) Q2 2026 Earnings Call Transcript

Apr -30

Source: seekingalpha.com

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Woodward (WWD) Beats Q2 Earnings and Revenue Estimates

Apr -29

Source: zacks.com

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Woodward Reports Second Quarter Fiscal Year 2026 Results

Apr -29

Source: globenewswire.com

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Artisan Global Opportunities Fund Q1 2026 Portfolio Activity

Apr -29

Source: seekingalpha.com

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Woodward to Report Q2 Earnings: Here's What Investors Should Know

Apr -27

Source: zacks.com

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Woodward Announces Declaration of Dividend

Apr -27

Source: globenewswire.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (4.62%)

6. Segments

Aerospace

Expected Growth: 4.5%

Woodward, Inc.'s Aerospace segment growth of 4.5% is driven by increasing demand for fuel-efficient aircraft, rising defense spending, and growing adoption of unmanned aerial vehicles (UAVs). Additionally, the company's focus on innovative engine control systems, propulsion systems, and aftermarket services contributes to its growth momentum.

Industrial

Expected Growth: 4.8%

Woodward Inc.'s Industrial segment growth of 4.8% is driven by increasing demand for industrial gas turbines, expansion in the aerospace market, and growing adoption of renewable energy sources. Additionally, the company's focus on innovation and R&D investments in industrial valves and actuators is contributing to the segment's growth.

7. Detailed Products

Aerospace Control Systems

Woodward's aerospace control systems provide advanced engine control and fuel systems for commercial and military aircraft, as well as for industrial and marine applications.

Aerospace Fuel Systems

Woodward's aerospace fuel systems provide advanced fuel management and delivery systems for commercial and military aircraft, as well as for industrial and marine applications.

Industrial Turbomachinery Controls

Woodward's industrial turbomachinery controls provide advanced control systems for industrial gas turbines, compressors, and pumps.

Industrial Valve Systems

Woodward's industrial valve systems provide advanced valve solutions for industrial applications such as power generation, oil and gas, and process industries.

Wind Turbine Systems

Woodward's wind turbine systems provide advanced control and pitch systems for wind turbines.

Industrial Gas and Steam Turbine Systems

Woodward's industrial gas and steam turbine systems provide advanced control and fuel systems for industrial gas and steam turbines.

8. Woodward, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes for Woodward, Inc. is moderate due to the availability of alternative products and services in the market.

Bargaining Power Of Customers

The bargaining power of customers is high due to the concentration of buyers in the market, giving them significant negotiating power.

Bargaining Power Of Suppliers

The bargaining power of suppliers is low due to the availability of multiple suppliers in the market, reducing their negotiating power.

Threat Of New Entrants

The threat of new entrants is moderate due to the moderate barriers to entry and the availability of resources in the market.

Intensity Of Rivalry

The intensity of rivalry is high due to the high level of competition in the market, leading to a competitive pricing strategy.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 25.84%
Debt Cost 7.88%
Equity Weight 74.16%
Equity Cost 10.43%
WACC 9.77%
Leverage 34.84%

11. Quality Control: Woodward, Inc. passed 6 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

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Huntington Ingalls

A-Score: 5.8/10

Value: 4.5

Growth: 4.2

Quality: 5.1

Yield: 4.0

Momentum: 10.0

Volatility: 6.7

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Woodward

A-Score: 5.1/10

Value: 0.9

Growth: 6.9

Quality: 6.6

Yield: 0.0

Momentum: 9.0

Volatility: 7.3

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Textron

A-Score: 4.9/10

Value: 4.7

Growth: 5.9

Quality: 5.1

Yield: 0.0

Momentum: 5.0

Volatility: 8.7

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BWXT

A-Score: 4.9/10

Value: 0.9

Growth: 6.3

Quality: 5.4

Yield: 2.0

Momentum: 9.0

Volatility: 5.7

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AAR

A-Score: 4.2/10

Value: 4.8

Growth: 4.8

Quality: 3.1

Yield: 0.0

Momentum: 7.5

Volatility: 5.3

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Axon Enterprise

A-Score: 3.8/10

Value: 0.0

Growth: 9.6

Quality: 5.2

Yield: 0.0

Momentum: 4.0

Volatility: 4.0

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

359.29$

Current Price

359.29$

Potential

-0.00%

Expected Cash-Flows