What Happened?
Shares of aerospace and defense company Woodward (NASDAQ: WWD) jumped 3% in the afternoon session after Deutsche Bank raised its price target on the stock to $400 from $360 while maintaining a 'Buy' rating.
The analyst's move came amid what appeared to be strong underlying momentum in the company's business. Woodward's aerospace segment benefited from strength in commercial services and defense. Meanwhile, its industrial business gained from solid demand for power generation, which included the continued need for backup power for data centers. The positive sentiment was also supported by a previously authorized share buyback program for up to $1.8 billion in outstanding shares.
After the initial pop the shares cooled down to $314.97, up 2.9% from previous close.
Is now the time to buy Woodward? Access our full analysis report here.
What Is The Market Telling Us
Woodward’s shares are not very volatile and have only had 6 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful, although it might not be something that would fundamentally change its perception of the business.
The biggest move we wrote about over the last year was 4 months ago when the stock dropped 2.8% on the news that a surprisingly weak August jobs report revealed the U.S. economy added far fewer jobs than anticipated.
The Bureau of Labor Statistics reported that non-farm payrolls rose by just 22,000, significantly missing the 75,000 expected by economists. Compounding the concerns, the unemployment rate climbed to 4.3%, its highest level in nearly four years. The report also included downward revisions to previous months' data, with June now showing the first net job loss since 2020. While a cooling labor market could encourage the Federal Reserve to cut interest rates, investors reacted negatively. The sharp slowdown in hiring sparked fears of a broader economic downturn, causing stocks to fall as the market weighed whether the Fed's potential actions would be enough to prevent a recession.
Woodward is up 83.8% since the beginning of the year, and at $314.97 per share, has set a new 52-week high. Investors who bought $1,000 worth of Woodward’s shares 5 years ago would now be looking at an investment worth $2,641.
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