Have you been paying attention to shares of Curtiss-Wright (CW)? Shares have been on the move with the stock up 2.1% over the past month. The stock hit a new 52-week high of $371.04 in the previous session. Curtiss-Wright has gained 54.8% since the start of the year compared to the -2.3% move for the Zacks Aerospace sector and the 23.3% return for the Zacks Aerospace - Defense Equipment industry.
The stock has an impressive record of positive earnings surprises, as it hasn't missed our earnings consensus estimate in any of the last four quarters. In its last earnings report on October 30, 2024, Curtiss-Wright reported EPS of $2.97 versus consensus estimate of $2.7 while it beat the consensus revenue estimate by 5.35%.
For the current fiscal year, Curtiss-Wright is expected to post earnings of $10.58 per share on $3.05 billion in revenues. This represents a 12.79% change in EPS on a 7.11% change in revenues. For the next fiscal year, the company is expected to earn $11.37 per share on $3.2 billion in revenues. This represents a year-over-year change of 7.43% and 5.14%, respectively.
Curtiss-Wright may be at a 52-week high right now, but what might the future hold for the stock? A key aspect of this question is taking a look at valuation metrics in order to determine if the company is due for a pullback from this level.
On this front, we can look at the Zacks Style Scores, as they provide investors with an additional way to sort through stocks (beyond looking at the Zacks Rank of a security). These styles are represented by grades running from A to F in the categories of Value, Growth, and Momentum, while there is a combined VGM Score as well. The idea behind the style scores is to help investors pick 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.
In terms of its value breakdown, the stock currently trades at 32.6X current fiscal year EPS estimates, which is a premium to the peer industry average of 30.9X. On a trailing cash flow basis, the stock currently trades at 27.6X versus its peer group's average of 24.1X. This isn't enough to put the company in the top echelon of all stocks we cover from a value perspective.
We also need to look at the Zacks Rank for the stock, as this supersedes any trend on the style score front. Fortunately, Curtiss-Wright currently has a Zacks Rank of #2 (Buy) thanks to favorable earnings estimate revisions from covering analysts.
Since we recommend that investors select stocks carrying Zacks Rank of 1 (Strong Buy) or 2 (Buy) and Style Scores of A or B, it looks as if Curtiss-Wright fits the bill. Thus, it seems as though Curtiss-Wright shares could still be poised for more gains ahead.
Shares of CW have been soaring, and the company still appears to be a decent choice, but what about the rest of the industry? One industry peer that looks good is Leonardo DRS, Inc. (DRS). DRS has a Zacks Rank of # 2 (Buy) and a Value Score of C, a Growth Score of A, and a Momentum Score of B.
Earnings were strong last quarter. Leonardo DRS, Inc. beat our consensus estimate by 20%, and for the current fiscal year, DRS is expected to post earnings of $1.05 per share on revenue of $3.13 billion.
Shares of Leonardo DRS, Inc. have gained 2.7% over the past month, and currently trade at a forward P/E of 33.98X and a P/CF of 28.28X.
The Aerospace - Defense Equipment industry may rank in the bottom 75% of all the industries we have in our universe, but there still looks like there are some nice tailwinds for CW and DRS, even beyond their own solid fundamental situation.
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