Have you invested in the shares of Curtiss Wright (CW)? Shares are on the move, with the stock up 10.6% over the past month. In the previous session, the stock hit a new 52-week high of $310.72. Curtiss-Wright has gained 39.1% year-to-date, compared to a gain of 3.5% for the Zacks Aerospace sector and a return of 22.2% for the Zacks Aerospace and Defense Equipment industry.
What is the reason for this outperformance?
The stock has a long track record of positive earnings surprises, having never missed our consensus estimates in any of the last four quarters. In its last earnings report on August 7, 2024, Curtiss-Wright reported earnings per share of $2.67 versus a consensus estimate of $2.24, while it beat the consensus estimate for revenue by 6.6%.
For the current fiscal year, Curtiss-Wright is expected to report earnings of $10.47 per share on revenue of $3.04 billion, representing an earnings per share change of 11.62% on a change in sales of 6.91%. For the next fiscal year, the company is expected to report $11.32 per share on revenue of $3.2 billion, representing a year-over-year change of 8.16% and 5.11%, respectively.
Evaluation metrics
Curtiss-Wright may be at a 52-week high right now, but what could the future hold for the stock? An important aspect of this question is looking at valuation metrics to determine if the company will pull back from these levels.
In this context, we can look at the Zacks Style Scores, as these provide investors with a variety of ways to sift through stocks (beyond looking at a security’s Zacks Rank). These styles are represented by grades ranging from A to F in the Value, Growth and Momentum categories, with a combined VGM score also available. Investors should view the Style Scores as a valuable tool that can help them select the most appropriate Zacks Rank stocks based on their individual investment style.
Curtiss-Wright has a Value Score of D. The stock’s Growth and Momentum Scores are B and C, respectively, giving the company a VGM Score of B.
As for the value breakdown, the stock is currently trading at 29.6 times estimated earnings per share for the current fiscal year, which is out of line with the industry average of 30.1. Based on trailing twelve-month cash flow, the stock is currently trading at 24.8 times estimated earnings per share, while the peer group average is 21.5. This is not enough to put the company in the top league from a value perspective of all the stocks we cover.
Zacks Rank
We also need to consider the stock’s Zacks Rank, as this overrides any trend related to the style score. Fortunately, thanks to rising earnings estimates, Curtiss-Wright currently has a Zacks Rank of #2 (Buy).
Since we recommend investors to select stocks with Zacks Rank #1 (Strong Buy) or #2 (Buy) and Style Scores of A or B, it looks like Curtiss-Wright passes the test. So, it seems like Curtiss-Wright stock has more gains ahead of it in the future.
How does CW compare to the competition?
CW’s shares have soared and the company still seems like a good pick, but what about the rest of the industry? One industry peer that is looking good is Elbit Systems Ltd. (ESLT). ESLT has a Zacks Rank of #2 (Buy) and a Value Score of B, a Growth Score of C and a Momentum Score of A.
Earnings last quarter were strong. Elbit Systems Ltd. beat our consensus estimate by 17.51% and for the current fiscal year, ESLT is expected to report earnings of $7.80 per share on revenue of $6.5 billion.
Elbit Systems Ltd. shares have gained 6.4% over the past month and are currently trading at a P/E ratio of 25.51 and a PCF of 18.98.
The Aerospace & Defense Equipment industry is in the top 26% of all industries in our universe, so it looks like there are some nice tailwinds for CW and ESLT, even beyond their own solid fundamental situation.
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