On Monday, Wolfe Research increased its price target for Curtiss-Wright (NYSE:) shares to $300 from the previous target of $260, while reaffirming its Outperform rating.
The firm highlighted that Curtiss-Wright’s stock has risen approximately 15% year-to-date, outperforming other names within its Defense coverage, with the average Defense name increasing by 7% in the same period. In contrast, the S&P 500 has seen a return of about 10% year-to-date in 2024.
The analyst at Wolfe Research noted Curtiss-Wright’s strong performance, maintaining the Outperform rating and emphasizing the company’s potential as a mid-cap defense contractor with a lesser-known advantage in nuclear capabilities.
The analyst pointed out that the electronics division of Curtiss-Wright has largely overcome previous supply chain issues, which could lead to margin expansion and an anticipated near-doubling of the company’s organic growth, according to management’s targets.
The report also underscored Curtiss-Wright’s unique position in the market, with exposure to nuclear power and potential benefits from investments in small modular reactors (SMRs), which could provide additional upside. The quality of the company’s earnings was noted to be solid, with free cash flow to net income (FCF/NI) conversion rates significantly higher than its peers.
Wolfe Research based the new price target on a price-to-earnings (P/E) multiple of 25.5 times, up from the previous multiple of around 22 times, applied to the estimated earnings for 2025. The firm considers this multiple to be reasonable when looking at the small to mid-size defense peer group, the recent uptick in organic growth, and the potential of Curtiss-Wright’s nuclear portfolio.
InvestingPro Insights
InvestingPro data shows that Curtiss-Wright (NYSE:CW) currently has a market capitalization of approximately $9.8 billion USD, and is trading at a P/E ratio of 27.69. This is slightly above the P/E multiple of 25.5 times that Wolfe Research applied to their 2025 earnings estimate. The company’s revenue has grown by 11.28% over the last twelve months as of Q1 2023, indicating a solid performance that aligns with the optimism expressed by Wolfe Research. Additionally, Curtiss-Wright’s stock is trading near its 52-week high, at 99.44% of the peak, reflecting investor confidence in the company’s prospects.
Two InvestingPro Tips that are particularly relevant in light of Wolfe Research’s analysis are that Curtiss-Wright has a perfect Piotroski Score of 9, suggesting strong financial health, and that the company has raised its dividend for 7 consecutive years, showcasing a commitment to shareholder returns. These metrics, along with the stock’s low price volatility, could provide investors with further confidence in the stability and growth potential of Curtiss-Wright.
For investors looking to delve deeper into Curtiss-Wright’s financials and stock performance, there are additional InvestingPro Tips available at https://www.investing.com/pro/CW. To access these insights and more, use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription.
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