Woodward (WWD:NAS) Fundamental Valuation Report

Fundamental Valuation Report


Industrials:Aerospace & Defense

This Report was generated using the valuation tools available on StockCalc.com. For a free 30 day trial click here.

Close Price/Date
$81.57 (USD) 15/11/2018

Weighted Valuation
$84.73 (USD)

Overall Rating
Fairly valued to slightly Undervalued by 3.9%

Valuation Models Analyst Consensus: $95.00 (USD)
(in order of importance) Adjusted Book Value: $77.43 (USD)
Multiples: $68.53 (USD)
Valuation Methods This company is:
Cash Flow: Undervalued on a Cash Flow Valuation
Comparable Company: Overvalued on a Comparable Valuation
Asset: Overvalued on an Asset Valuation

Company Overview (WWD:NAS USD)

Price 81.57
Range 79.32 – 81.64
52 week 69.63 – 84.65
Open 79.61
Vol / Avg. 204066/269523
Mkt cap 5.04B
P/E 28.93
Div/yield 0.55/0.01
EPS 2.82
Shares 61.78M
Beta 1.31

Company Description

Woodward Inc creates energy control and optimization solutions. The systems and solutions can help evaluate performance, efficiencies, and emissions of its customers’ products. Specifically, the control and optimization solutions are for aerospace, energy, and other industrial markets. Fluid and electrical energy, motions, or other outputs may be monitored or improved with the company’s products. Also, Woodward provides aftermarket repair and replacements to enhance support. A majority of sales derive from the United States, but facilities in different regions of the world help assemble and promote its products through various locations.

Valuation Details

 We have up to 6 valuation points for each company. Details are at the bottom of the report.

Discounted Cash Flow and Sensitivity Analysis for WWD:NAS

Using a discounted cash flow model we generated an intrinsic value of $105.66 (USD) for WWD:NAS

Sensitivity Analysis

(showing how changes in the input variables impact the DCF calculation)

WWD:NAS Current Values Valuation If Dropped * Valuation If Raised *
Calculated Value: $105.66 1% 5% 1% 5%
WACC (or Ke) 7.77 $135.97 $85.52
Terminal Growth Rate 2.80 $87.18 $133.44
Tax Rate 0.18 $113.66 $97.66
Cash Flow 668,097,200 $97.50 $113.81
Capital Expenditures -177,777,200 $103.64 $107.67
Long Term Debt 727,153,000 $106.25 $105.07

* Changes are absolute: ex WACC from 8% to 7%

Comparables Model

Using similar companies and price based ratios we generated a valuation of $49.90 (USD) for WWD:NAS. We also generated a valuation of $68.36 (USD) using other metrics and comparables.
The comparable companies were Aerojet Rocketdyne Hldgs (AJRD:NYS), Esterline Technologies (ESL:NYS), Kaman (KAMN:NYS), Moog (MOG.B:NYS) and Spirit AeroSystems (SPR:NYS).

Company WWD:NAS End Date Value
Earnings/Share $2.82 (USD)
Book Value/Share $23.82 (USD)
Sales/Share $34.74 (USD)
Cash Flow/Share $4.49 (USD)
EBITDA/Share $5.75 (USD)
Price Based on Comps Adjustment Factor (%)
$104.31 (USD) -22.8
$103.64 (USD) -47.2
$44.33 (USD) 25.4
$58.34 (USD) -81.8
$64.90 (USD) -1.9
27.89 PE Ratio 36.99 45.87 63.10 30.54 28.78 16.67
3.09 PB Ratio 4.35 6.98 1.96 2.76 2.08 7.98
2.12 PS Ratio 1.28 1.34 1.73 0.97 1.03 1.32
16.41 PCF Ratio 17.35 9.35 20.15 10.37 28.77 18.12
16.56 EV to EBITDA 11.28 9.87 13.83 12.59 10.53 9.59


Using a multiples approach we generated a valuation of  $68.53 (USD) for WWD:NAS

Company WWD:NAS End Date Value
Earnings/Share $2.82 (USD)
Book Value/Share $23.82 (USD)
Sales/Share $34.74 (USD)
Cash Flow/Share $4.49 (USD)
EBITDA/Share $5.75 (USD)
Price Based on Comps Adjustment Factor
$62.39 (USD) 0
$74.71 (USD) 0
$68.72 (USD) 0
$58.03 (USD) 0
$78.82 (USD) 0
Ratios Ratio Average
PE Ratio 22.13
PB Ratio 3.14
PS Ratio 1.98
PCF Ratio 12.93
EV to EBITDA 13.70

Adjusted Book Value versus Historical Price to Book

The average the Price to Book ratio for  WWD:NAS for the last 10 years was  3.10

We ran the Adjusted Book Value for  WWD:NAS and generated a book value of  $24.99 (USD)
By multiplying these we get an adjusted valuation of  $77.43 (USD)

Analyst Data

In the Stockcalc database there are 3 analysts that provide a valuation for WWD:NAS. The 3 analysts have a concensus valuation for WWD:NAS for 2019 of $95.00 (USD).

WWD:NAS Woodward

Analyst Recommendation
Buy Hold Sell Rating
(of 5)
Guidance As Of
2 2 0 4.0000 Outperform 2018-11-14

Current Price: 81.57 USD

Analyst Consensus
USD Millions 2019 2020 2021
Mean EPS 4.75 5.11 5.67
# EPS Analysts 4 2 1
Mean Revenue 2,716.90 2,894.90 3,087.90
# Revenue Analysts 3 2 1
Mean Target Price 95.00
Mean Cash Flow 6.53 7.24 7.61
Mean EBITDA 534.90 600.40 649.90
Mean Net Income 294.30 328.30 355.90
Mean Debt Outstanding 763.00 628.20 525.30
Mean Tax Rate 21.00 21.60
Mean Growth Rate 12.50
Mean Capital Expenditure 121.70 121.50 123.50

Explanation of Valuation Models

We have up to 6 valuation points for each company in the database.

The Discounted Cash Flow (DCF) valuation is a cash flow model where cash flow projections are discounted back to the present to calculate value per share. DCF is a common valuation technique especially for companies undergoing irregular cash flows such as resource companies (mining, forestry, oil and gas) going though price cycles or smaller companies about to generate cash flow (junior exploration companies, junior pharma, technology firms…).

The Price Comparables valuation is the result of valuing the company we are looking at on the basis of ratios from selected comparable companies: Price to Earnings, Price to Book, Price to Sales, Price to Cash Flow, Enterprise Value (EV) to EBITDA. Each of these ratios for the selected comparable companies are averaged and multiplied by the values for the company we are interested in to calculate a value per share for our selected company.

We have included the Other Comparables as a way to value companies that cannot be valued using Earnings based ratios. This technique is very useful for companies still experiencing negative cash flows such as mining exploration firms. We use Cash/Share, Book Value/Share, MarketCap, 1 Year Return, NetPPE as the ratios here. Each of these ratios for the selected comparable companies are averaged and multiplied by the values for the company we are interested in to calculate a value per share for our selected company.

Multiples are similar to Price comparables where we look at current or historic ratios for the company in question to assess what it should be worth today based on those historic ratios. We use the same 5 ratios as in the price comparables and value the company with its historic averages.

With Adjusted Book Value (ABV) we calculate the book value per share for the company based on its balance sheet and multiply that book value per share by its historical price to book ratio to calculate a value per share.

If we have Analyst coverage for the company we use the consensus target price here.

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