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Woodward (WWD) is winding down its on-highway natural gas truck business in China after years of seeking a buyer, aiming to sharpen its Industrial segment focus while maintaining record fiscal 2025 sales and earnings.
See our latest analysis for Woodward.
The decision to exit the China on highway unit comes after a strong run in the shares, with a 90 day share price return of 32.18% and a 1 year total shareholder return of 77.00%, alongside record fiscal 2025 sales and earnings and recent acquisition and buyback announcements. Overall, Woodward’s short term share price momentum appears strong and is consistent with multi year total shareholder returns of 217.20% over three years and 181.74% over five years.
If you are looking beyond a single industrial controls name, this could be a moment to widen your watchlist with aerospace and defense stocks.
With Woodward posting record 2025 results, a US$333.06 share price and analysts seeing around 10% upside to a US$366.25 target, you have to ask: is there still an entry point here, or is future growth already priced in?
Compared with Woodward’s last close of US$333.06, the most followed narrative points to a fair value of US$317.13, suggesting the current price sits somewhat above that level but still within the range of analysts’ expectations.
Strategic capital allocation toward next-generation manufacturing capabilities, vertical integration, and automation is set to improve operational efficiency and cost structure. This, combined with pricing power from value-added innovation, is likely to drive net margin expansion in the medium to long term.
Curious what kind of revenue run rate and margin profile has to line up for that fair value to work? The narrative leans on steadily compounding earnings, firm pricing power and a richer future earnings multiple than the broader sector. The exact mix of growth and profitability assumptions may surprise you.
Result: Fair Value of $317.13 (OVERVALUED)
Have a read of the narrative in full and understand what’s behind the forecasts.
However, heavy investment in new facilities and acquisitions, along with uncertainty around free cash flow and margins into 2026, could quickly challenge that upside case.
Find out about the key risks to this Woodward narrative.
If you look at the numbers and come to a different conclusion, or just prefer to work from your own assumptions, you can build a custom thesis in a few minutes with Do it your way.
