The manufacturer and service provider of energy controls and optimization solutions provided 2015 full year capital expenditure guidance well above estimates, analysts said.
"The catalyst for the downgrade is FY15 capex guidance of $270 million that is well above our prior estimate of $140 million," analysts said, adding, "We would look for a pullback in the shares to get more constructive, or for capex to begin to decline, which should happen in FY16."
Shares of Woodward closed up 0.45% at $51.81 yesterday.
Separately, TheStreet Ratings team rates WOODWARD INC as a Buy with a ratings score of A-. TheStreet Ratings Team has this to say about their recommendation:
"We rate WOODWARD INC (WWD) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, impressive record of earnings per share growth, compelling growth in net income and good cash flow from operations. We feel these strengths outweigh the fact that the company shows low profit margins."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- WWD's revenue growth has slightly outpaced the industry average of 2.3%. Since the same quarter one year prior, revenues slightly increased by 8.4%. Growth in the company's revenue appears to have helped boost the earnings per share.
- The current debt-to-equity ratio, 0.59, is low and is below the industry average, implying that there has been successful management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.31, which illustrates the ability to avoid short-term cash problems.
- WOODWARD INC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, WOODWARD INC increased its bottom line by earning $2.10 versus $2.01 in the prior year. This year, the market expects an improvement in earnings ($2.45 versus $2.10).
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Machinery industry. The net income increased by 94.4% when compared to the same quarter one year prior, rising from $23.66 million to $46.00 million.
- Net operating cash flow has increased to $59.25 million or 48.00% when compared to the same quarter last year. In addition, WOODWARD INC has also vastly surpassed the industry average cash flow growth rate of -21.94%.
- You can view the full analysis from the report here: WWD Ratings Report