Executive Summary
Curtiss Wright Corporation (CW) continues to demonstrate robust operational performance, driven by secular tailwinds in global defense spending and the burgeoning “nuclear renaissance.” The fundamental backdrop remains favorable, anchored by the Generation III+ Westinghouse AP1000 nuclear reactor program and Virginia-class submarine procurement.
Business Description & Recent Developments
Company Overview
Curtiss-Wright is a diversified global manufacturer of highly engineered, critical-function products for the commercial, industrial, defense, and energy markets. The company operates through three primary segments:
- Aerospace & Industrial (29.9% of 2024 Sales): Supplies sensors, actuators, and surface treatment services for commercial aerospace and general industrial markets.
- Defense Electronics (29.2% of 2024 Sales): Provides mission-critical avionics, tactical communications, and ruggedized computing for defense platforms.
- Naval & Power (40.9% of 2024 Sales): The largest segment, supplying nuclear propulsion components (pumps, valves) for the U.S. Navy and commercial nuclear power plants.
Recent Developments
- C-17 Modernization Win (Feb 2026): On February 9, 2026, CW was awarded a contract exceeding $400 million by Boeing to supply mission computers for the U.S. Air Force C-17 Globemaster III fleet. This massive win reinforces the Defense Electronics segment’s growth visibility and was announced one day after the publication of the primary source report, acting as a positive catalyst.
- Acquisition of Ultra Energy (Jan 2025): The company completed the acquisition of Ultra Energy (Ultra Nuclear Limited and Weed Instrument Co.) for $200 million in January 2025. This strategic tuck-in enhances CW’s portfolio in neutron monitoring and reactor protection systems, directly supporting its commercial nuclear expansion strategies in the UK and North America.
Industry & Competitive Positioning
The Nuclear Renaissance
The global shift toward clean energy has firmly established nuclear power as a critical component of the energy mix. In the U.S., executive actions in May 2025 aim to quadruple nuclear capacity to 400 GW by 2050. Curtiss-Wright is uniquely positioned as a key supplier of reactor coolant pumps (RCPs) for the Westinghouse AP1000 design. With 65 new reactors under construction globally and tech giants like Amazon and Microsoft investing in nuclear-powered data centers, the addressable market for CW’s Naval & Power segment is expanding rapidly.
Defense Sector Dynamics
The geopolitical environment remains volatile, driving sustained increases in defense budgets. The U.S. administration has proposed a defense budget increase to $1.5 trillion by 2027. CW is deeply embedded in high-priority programs, including the Virginia-class and Columbia-class submarines, where it supplies sealed pumps and valves.
Competitive Analysis
- Valuation: CW trades at a Forward P/E of 41.96x, compared to the industry average of 46.85x.
- Profitability: The company boasts a Return on Equity (ROE) of 18.82%, significantly outperforming peers like Moog Inc. (15.47%) and Ducommun (7.70%).
- Dividend: CW is a reliable dividend payer, declaring a total of $0.96 per share annualized for 2026, representing a yield of ~0.15%. While the yield is modest, the payout ratio is low (~7%), leaving ample room for increases or buybacks.
Historical Financial Performance
Curtiss-Wright has delivered consistent top-line growth and margin expansion, validating its “Pivot to Growth” strategy.
- Revenue Growth: Sales grew from $2.845 billion in 2023 to $3.121 billion in 2024, a year-over-year increase of 9.7%.
- Earnings Momentum: The company reported full-year 2024 GAAP EPS of roughly $10.90, with 2025 estimates projected at $13.09. In Q3 2025, the company delivered an EPS surprise of 3.7%, posting $3.40 against a consensus of $3.28.
- Segment Margins: The Defense Electronics segment is a standout performer, with adjusted operating margins expanding 270 basis points to 29.2% in the most recent reported quarter. This mix shift toward higher-margin electronics is a key driver of overall profitability.
- Balance Sheet: As of September 30, 2025, CW held $225 million in cash against $969 million in long-term debt. The net debt position is manageable given the company’s strong free cash flow generation, which is guided to $520–$535 million for full-year 2025.
Financial Forecasts
Forecasts (FY2026 – FY2028):
- 2026E Revenue: $3.64 billion (Consensus: $3.64B). We anticipate Naval & Power to lead growth (+10% YoY) due to the realization of the Ultra Energy synergies.
- 2026E EPS: $14.24. This reflects continued margin expansion to ~20% as supply chain frictions ease.
- 2027E Outlook: The revenue may approach $3.9 billion, supported by the commencement of the C-17 modernization deliveries and increased submarine production rates.
Reasons to Hold/Accumulate on Dips
- Moat in Nuclear Propulsion: CW is effectively a sole-source supplier for critical U.S. Navy nuclear propulsion components. The barriers to entry are insurmountable for competitors, guaranteeing recurring revenue for decades.
- Commercial Nuclear Upside: The Ultra Energy acquisition positions CW to capture value not just from new builds (AP1000) but from the modernization of the existing fleet, a market driven by data center energy demand.
- Strong Cash Conversion: With free cash flow conversion consistently >100% of net income, CW has the firepower to fund further accretive M&A or return capital to shareholders.
Upside Catalysts:
- International AP1000 Orders: Confirmation of new reactor builds in Poland or Bulgaria (projected 20-25 reactors in Eastern Europe) would drive backlog significantly higher.
- Defense Budget Ratification: The passing of the $1.5T U.S. defense budget for 2027 would provide concrete funding visibility for the Columbia-class submarine program.
Downside Risks:
- Supply Chain & Tariffs: The imposition of 25% tariffs on steel and aluminum by the U.S. government poses a direct threat to margins. CW relies on high-grade metals for its pumps and valves; inability to pass these costs to customers could compress margins.
- Labor Shortages: With 25% of the aerospace workforce over age 55, CW faces execution risk if it cannot replace retiring skilled engineers.
Conclusion
Curtiss-Wright is a high-quality compounder operating at the intersection of two powerful secular trends: global rearmament and the energy transition. The company’s financial discipline and strategic M&A (Ultra Energy) have created a robust platform for growth.