3 Reasons Why Curtiss-Wright Was Upgraded By William Blair

Curtiss-Wright Corp. (NYSE: CW) is an attractive investment after a recent dip from nearly $145 in April to its current level of around $129, according to William Blair.

The Analyst

William Blair's Nicholas Heymann upgraded Curtiss-Wright from Market Perform to Outperform with no assigned price target.

The Thesis

The case for being bullish on Curtiss-Wright is threefold, Heymann said in the upgrade note:

The stock's recent weakness can be attributed to the company transitioning from the Russell 2000 to the Russell 1000 as of June 22, Heymann said. The company's multiyear fundamental outlook for double-digit earnings growth has seen zero change, the analyst said. (See Heymann's track record here.)

The potential expansion of a trade war between the United States and China is unlikely to impact Curtiss-Wright's highly profitable reactor cooling pumps, Heymann said. It's unlikely that future RCP sales to China will be impacted by a strained Sino-American trading relationship, in the analyst's view.

The stock multiple for Curtiss-Wright could move higher as the company's growth prospects become better understood by investors, Heymann said. The company is likely to evaluate inorganic opportunities in addition to organic growth, which should re-accelerate, the analyst said.

Curtiss-Wright likely feels it is necessary to complete multiple smaller acquisitions in the near term, as it has $750 million in capital readily available, Heymann said. 

Price Action

Shares of Curtiss-Wright were trading higher by nearly 1 percent Monday afternoon.

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