Woodward's (WWD) increasing volumes, pricing, automation, and products will push its aerospace margins higher and drive growth in earnings per share in the mid-to upper teens, Truist said in a note to investors on Friday.
The evaluation followed Truist's tour of Woodward's Rock Cut facility in Illinois, where analysis assessed products and production processes and found "lean operations, automation and continuous flow" meaning that "parts never stop moving."
"Raw material comes into the building and leaves in a box and all processes along the way were designed and built into the production line and related systems," producing high volumes using near 100% automation, Truist said
"Automation should continue to help drive down costs and improve profitability," Truist wrote, adding that Woodward's aerospace segment margins continue to have space to expand.
Truist said it is maintaining its buy rating on Woodward shares while raising its price target to $232.00 from its previous $209.00.
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