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Woodward Inc. NASDAQ: WWD manufactures critical control systems and components for the commercial aviation, industrial and defense industries. Modern commercial passenger airliners can contain up to five million components, and military aircraft can contain up to two million. This aerospace leader supplies key components, from engines and power systems to sensors and missile guidance systems, to ensure consistent, trouble-free operation.

Some of Woodward’s high-profile clients include Raytheon Technologies Company. New York Stock Exchange: RTX, Caterpillar Inc. New York Stock Exchange: CAT, General Electronic New York Stock Exchange: GE, Baker Hughes Co. NASDAQ: BKR, Boeing Company. New York Stock Exchange: BA and Airbus.

Despite challenges in its industrial segment, Woodward delivered record growth in fiscal 2024, driven by strong sales in its aerospace segment. Stocks are now forming a technical pattern that can indicate potential future price movements, opening up new opportunities for investors.

Record sales growth in 2024

Woodward posted record fiscal 2024 revenue, up 14% year over year to more than $3 billion. The company delivered 45% YoY earnings per share growth ($6.11), 61% YoY growth in net income to $373 million and 46% YoY growth in adjusted free cash flow to $348 million.

Earnings per share for the fourth quarter of fiscal 2024 were $1.41, beating analysts’ consensus estimates by 15 cents. Revenue rose 10% YoY to $855 million, beating the consensus estimate of $810.39 million.

Aerospace sales grew by double digits

Industrial sales fall due to oil and gas

Woodward’s industrial sales fell 6% YoY to $302 million and profits fell 30% to $38 million, resulting in margins falling 430 bps. up to 12.6%. Industrial markets consist of three main segments: power generation, transportation, and oil and gas. The power generation sector saw year-over-year sales growth of 11%, driven by robust global power demand driven by data centers and associated power backup. This has also created increased demand for network stability support. The transport segment saw growth of 22% YoY, driven by a healthy global maritime market with busy shipyards and higher occupancy.

There is a growing demand for alternative fuels in the maritime industry. However, demand for heavy trucks in China has been weak due to a weak local economy and narrowing fuel price differentials. Oil and gas segment sales fell 3% YoY due to overall lower demand for oil and gas. The outlook remains positive with potential investment in refining and petrochemical activities in China, India and the Middle East.

The Complete Guide to 2025

CEO Chip Blankenship was optimistic during the conference call. He noted that both segments, aerospace and industrial, showed strong performance. Aerospace sales rose 15% YoY to a record level, and margins expanded 260 basis points. Industrial sales continued to reach record levels, driven by its road equipment product line in China, resulting in record earnings per share and free cash flow increasing by more than US$100 million YoY. He noted that the shutdown had a negative impact on Boeing’s direct sales, but the company has refocused, reallocating resources to other areas.

Throughout 2025, the company expects:

• earnings per share: $5.75 to $6.25 (consensus estimate $5.85)

• Income: $3.3 billion to $3.5 billion ($3.38 billion consensus estimate)

• Free cash flow: From 350 to 450 million dollars.

• Aerospace sales: Increase from 6% to 13% YoY

• Industrial sales: Decrease by 7.5–11% y/y.

The growing need for artificial intelligence and other computer technologies is driving growing demand for data center capacity. Blankenship notes that “Woodward is well positioned to take advantage of this opportunity, which includes control, actuation and fuel metering systems for both natural gas baseload and diesel backup.”

WWD buttstock forms a symmetrical triangle

A symmetrical triangle consists of a descending (falling) upper resistance line converging with an ascending (rising) lower support line at the top point. A breakout occurs when a stock rises above the upper trend line resistance line. A breakout occurs when a stock falls below the lower support line of the trend line. A breakout or breakdown becomes noticeable as the stock approaches a top and the channel narrows.

WWD formed upper descending trendline resistance near $187.44, while ascending lower trendline support began at $145.80. A strong Q4 earnings report triggered a gap that peaked at $201.64, and also triggered a gap and a crap “sell the news” reaction that sent WWD slipping back into a symmetrical triangle range. The stock broke above the upper trendline to retest the lower trendline and secure daily VWAP support at $168.83. The daily RSI indicator also stopped at the 43rd band. From here, WWD will either fall below the lower trendline or retest the upper trendline, eventually establishing a breakout as it approaches the top. Fibonacci (Fib) pullback support levels are at $161.66, $152.81, $145.80 and $140.29.

WWD’s average consensus price target is $187.44, suggesting an upside of 10.32%. and his highest analyst price target is at US$228. It has four analyst “Buy” ratings and five “Hold” ratings. The stock’s short interest is 1.73%.

Bullish investors may consider using cash-backed puts at Fibonacci retracement support levels to buy the dip. If the stock is allocated, then writing a covered call at the upper Fibonacci levels implements a wheel strategy to generate additional income while generating an annual dividend yield of 0.59%.

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