WWD Stock Appreciates 85% in 12 Months: What's Triggering the Uptrend?

Woodward, Inc. WWD stock has climbed 85% over the past year, outpacing the Aerospace -Defense Equipment industry’s rise of 30.3%. It has also surpassed the Zacks Aerospace sector and the S&P 500 composite’s growth of 30.9% and 15.1%, respectively.

Moreover, WWD has topped several of its peers, including Hexcel Corporation HXL, Axon Enterprise AXON and AAR Corp. AIR. AIR and HXL have risen 41.4% and 21%, respectively, while AXON fell 4.9% during the same period. Closing at $315.2 in yesterday’s trading session, WWD stock is roughly on par with its 52-week high of $316.56.

In essence, Woodward’s stock rally reflects multiple reinforcing factors, including solid operating results and earnings beats, strong 2026 guidance and growth visibility, tailwinds in aerospace, defense and industrial markets, shareholder-friendly capital allocation and broad investor momentum. Let’s unpack WWD’s pros and cons in detail to check if the stock is the right fit for your portfolio.

WWD’s Sector Dynamics & Macro Tailwinds

Woodward is gaining from continued demand momentum across the Aerospace segment and Core Industrial (power generation, oil & gas and marine transportation) units. Revenues from Aerospace are expected to strengthen in the coming quarters, supported by a robust commercial aftermarket and rising defense activity, despite ongoing supply-chain challenges. In the last reported quarter, segment sales rose 19.6% year over year, driven by broad-based gains in commercial services and defense OEM. Defense OEM and services revenue surged 27% and 80%, respectively, while commercial OEM sales were flat and services jumped 40%. For fiscal 2026, it expects Aerospace revenue growth of 9%–15%, with segment margins of 22%–23%.

The industrial segment continues to benefit from strong demand for power generation, driven by rising needs for primary and backup power at data centers and increased investment in gas-fired generation to support grid stability. Growth in alternative fuels across the marine industry, higher global vessel utilization and a favorable investment outlook in Middle East oil & gas and India’s refining and petrochemical sectors further support momentum. Management expects demand to remain strong in fiscal 2026, with Industrial sales projected to grow 5%–9% and segment margins of 14.5%–15.5%, contributing to consolidated revenue growth of 7%–12%.

Woodward is increasing investments in technology, automation and new facilities to improve efficiency and capture new business. The company continues to invest in R&D to reduce fuel consumption and emissions while divesting non-core assets, including its gas turbine combustion parts business. It also expanded its Glatten facility to boost capacity and streamline operations. The data center backup power–focused expansion is running ahead of schedule and guided by its 3P principles to enhance automation, flow and inventory turns. Woodward strengthened its electromechanical actuation capabilities through a strategic acquisition, adding advanced HSTA technologies and expanding its direct supply relationship with Airbus.

Woodward, Inc. Price and Consensus

Woodward, Inc. price-consensus-chart | Woodward, Inc. Quote

Additional initiatives include a multiyear ERP upgrade, increased MRO readiness to support aftermarket growth, expansion of regional service centers and broader automation across manufacturing sites. A key investment is the new, highly automated advanced manufacturing facility in Spartanburg, SC, which will support A350 spoiler actuator production and future aerospace programs, with roughly $130 million of fiscal 2026 capital allocated to its build-out.

Furthermore, Woodward’s disciplined capital-allocation strategy supports long-term growth and shareholder returns, prioritizing reinvestment, cash returns and selective M&A. The company is investing in a new state-of-the-art facility for the Airbus A350 spoiler actuation program and expanding electromechanical actuation through the Safran acquisition, while accelerating automation, driving higher capital spending over the next few years.

Woodward returned $238 million to shareholders in fiscal 2025, completed its prior $600 million buyback program early and recently authorized a new three-year $1.8 billion repurchase plan. For fiscal 2026, it expects to return $650–$700 million to shareholders, underscoring balance-sheet strength and capital discipline.

What Could Temper WWD’s Rally?

While the upside has been strong, several factors such as volatile China on-highway natural-gas truck market, supply-chain woes within Aerospace, global macro uncertainty and rising costs are likely to hamper its growth trajectory. In fiscal 2025, the Industrial segment’s earnings were $183 million, down from $230 million in the prior year. The decline was primarily due to lower volumes and an unfavorable sales mix stemming from reduced China on-highway demand. It also faces intense competition from a number of major players in the United States and abroad. Changes in competitive conditions, including factors like the availability of new products and services, introduction of new channels of distribution and changes in OEM and aftermarket pricing, will likely hamper its association with clients and affect sales.

WWD Trades at a Discount

WWD stock is trading at a discount, with forward 12-month price/earnings of 38.81X compared with the industry’s 46.23X, making it a lucrative investment opportunity.

Investors Action: Buy WWD Now

Management remains confident in Woodward’s strategic position, supported by record results, strong demand across core markets and key wins such as the Airbus A350 spoiler program. For fiscal 2026, the company expects 7%–12% revenue growth, ongoing operational improvements and execution of its new $1.8 billion share buyback, alongside disciplined investment in automation and manufacturing capacity to drive further growth and productivity.

With a Zacks Rank #2 (Buy) at present, along with a compelling valuation, WWD seems to be a good bet right now. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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