Citi expects Curtiss-Wright , an engineering firm with an enormous nuclear enterprise, to journey the wave of elevated world army spending. Analyst Jason Gursky initiated analysis protection of the protection and aviation firm, which traces its roots again to the unique pioneers of aviation , Glenn Curtiss and Wilbur and Orville Wright, with a purchase score and a 12-month value goal of $410, implying about 12% potential upside. This yr, shares have superior about 6.2% after hovering 60% in 2024, 34% in 2023, 21% in 2022 and 20% in 2021. In response to the analyst, saying Curtiss-Wright can journey development within the aerospace and protection trade with “nuclear optionality.” He expects world army spending to extend all through the remainder of the last decade in an effort to discourage short- and longer-term geopolitical considerations in Europe and the Pacific. Gursky is optimistic that Curtiss-Wright can capitalize on this development to change into internet money optimistic by 2026, notably given its sturdy historical past of with the ability to de-lever its stability sheet. He expects the corporate to boast 13% earnings development by means of 2027 and constant money conversion. CW 1Y mountain Curtiss-Wright inventory over the previous yr. “We anticipate DoD spending tendencies and initiatives that prioritize Plane, Shipbuilding, and C4I spending to drive protection end-market revenues,” Gursky wrote in a Tuesday notice to purchasers. “Increased manufacturing charges for brand spanking new plane are prone to improve Aerospace & Industrial aftermarket revenues whereas world demand for extra environment friendly vitality options suggests strong nuclear OE [operating expense] and aftermarket income visibility.” Key catalysts for Curtiss-Wright’s development embrace larger OE construct charges for business plane platforms, extra nuclear awards that broaden Curtiss-Wright’s footprint in business nuclear energy OE and aftermarket areas, and mergers and acquisitions bulletins to extend nuclear energy, protection, and different core capabilities, based on Gursky. He additionally talked about potential trade developments such because the timing of contract awards within the Business Nuclear Aftermarket plants extensions that proceed within the U.S. and overseas, in addition to current small modular reactor, or SMR, partnerships between Curtiss-Wright and NuScale, TerraPower and X-energy, and the potential for brand spanking new ones, as occasions that might have an effect on the inventory. A partnership instance consists of Curtiss-Wright’s 2022 most well-liked strategic provider settlement with X-energy to to advance the design and deployment of X-energy’s Xe-100 superior SMRs.
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