On Friday, Truist Securities adjusted its stock price target for Curtiss-Wright (NYSE:CW), a diversified global provider of highly engineered, technologically advanced products and services, to $304.00, marking an increase from the previous target of $270.00. The firm retained a Hold rating on the stock.
The adjustment follows a review by Truist Securities, which included modest changes to their model and expectations that management will reaffirm or slightly raise its outlook for 2024.
The analyst anticipates that third-quarter 2024 revenues will show a sequential decline compared to the second quarter of 2024, attributing the decrease to timing issues. However, adjusted earnings per share (EPS) for the third quarter are expected to align with those of the previous quarter.
The commercial aerospace sector may experience some softness due to persistent challenges in aircraft production. In contrast, the defense sector is anticipated to remain a robust area of performance for Curtiss-Wright.
The analyst highlighted that upcoming updates on the company's restructuring efforts, order activity within the general industrial market, the timing of the Ultra Energy acquisition's closure, and overall progress in nuclear energy will be key points of interest.
Specific attention will be directed towards the company's commentary on the restart of the Three Mile Island nuclear power station and the potential revenue opportunities it presents. Moreover, developments related to the AP1000 reactor and other small modular reactor (SMR) projects will be closely monitored. These factors are likely to influence Curtiss-Wright's performance and strategic direction in the near term.
In other recent news, Curtiss-Wright Corporation announced a significant 11% increase in sales to $785 million, a 16% rise in operating income, and a 24% growth in diluted earnings per share to $2.67.
This strong financial performance led to an expansion of the company's share repurchase program by $100 million, bringing the total anticipated buybacks for 2024 to $150 million. The company's Board of Directors also declared a quarterly dividend of $0.21 per share.
In addition, Curtiss-Wright secured a $26 million contract to modernize the Belgian Air Force's aircraft arresting systems. This development coincides with the company's acquisition of Ultra Energy.
Furthermore, Curtiss-Wright has entered into a Memorandum of Understanding with Westinghouse Electric Company to collaborate on nuclear reactor projects in Canada, reinforcing both companies' commitment to enhancing nuclear energy capabilities.
Baird analysts have responded positively to these developments, raising the price target for Curtiss-Wright shares from $300 to $312 and maintaining an Outperform rating. The company's Defense Electronics margins have notably surpassed market expectations, contributing to a record backlog of over $3.2 billion, with an 18% increase in the company's order book.
These recent developments reflect Curtiss-Wright's strategy to deliver shareholder value while maintaining a focus on long-term growth.
InvestingPro Insights
Curtiss-Wright's recent performance aligns with several InvestingPro Tips, providing additional context to Truist Securities' analysis. The company's stock has shown remarkable strength, with InvestingPro data indicating a 77.42% price total return over the past year and a 63.26% return year-to-date. This robust performance is reflected in the InvestingPro Tip noting a "High return over the last year."
The company's financial health appears solid, with an InvestingPro Tip highlighting that "Liquid assets exceed short term obligations." This financial stability could support Curtiss-Wright's ability to navigate the anticipated softness in the commercial aerospace sector and capitalize on opportunities in defense and nuclear energy, as mentioned in the article.
Investors should note that Curtiss-Wright is trading near its 52-week high, with the stock price at 99% of its 52-week high. This aligns with the InvestingPro Tip stating the stock is "Trading near 52-week high," which could be a factor in Truist Securities' decision to maintain a Hold rating despite raising the price target.
For those seeking a more comprehensive analysis, InvestingPro offers 18 additional tips for Curtiss-Wright, providing a deeper understanding of the company's financial position and market performance.
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