Jefferies raises HEICO stock price target ahead of FQ3 results

Published 08/14/2024, 12:18 AM

On Tuesday, Jefferies updated its outlook on HEICO (NYSE:HEI), a leading aerospace and electronics manufacturer, by raising its price target to $275 from $255 while keeping a Buy rating on the stock. The firm anticipates HEICO to report its third fiscal quarter earnings for July on August 26, after the market closes.

The analyst predicts that HEICO will post earnings per share (EPS) of $0.88 for the fiscal third quarter, which is slightly below the consensus estimate of $0.92. This forecast is based on an expected 6% organic growth. The Flight Support Group (FSG) is projected to see an 11% increase, while the Electronic Technologies Group (ETG) is estimated to remain flat.

In terms of profitability, the analyst estimates a 22.3% operating margin for FSG, attributing this to a continued positive mix of products and services. Meanwhile, ETG's margin is expected to slightly decrease to 23.2% from 23.4%, due to ongoing mix headwinds that affect the segment's performance.

Looking ahead to the fiscal year 2024, the analyst maintains an estimated EPS of $3.50, unchanged from previous forecasts. This expectation is supported by a predicted 7% organic growth for the company. The new price target and earnings estimates reflect the firm's outlook on HEICO's financial performance and market position.

In other recent news, HEICO Corporation has seen a series of upgrades from various analysts. Stifel maintained a Buy rating on HEICO, raising the stock's price target to $250 due to a strong outlook for the aerospace company. BofA Securities also raised its price target for HEICO, citing high demand for the company's products and an expanding market presence.

HEICO's fiscal second-quarter earnings per share (EPS) of $0.88 exceeded consensus estimates, with sales reaching $955 million, a 39% increase year-over-year. Benchmark raised the price target for HEICO shares to $245, noting a surge in aftermarket demand and anticipated product synergies from the acquisition of Wencor.

Morgan Stanley upgraded HEICO's stock from Underweight to Equal-weight, raising the price target to $225. Truist Securities increased its price target to $240, and RBC Capital raised its price target to $250, both citing strong earnings and successful strategic initiatives.

In addition to these upgrades, HEICO declared an increased semiannual cash dividend of $0.11 per share, reflecting the company's robust performance and positive future outlook.

InvestingPro Insights

As HEICO (NYSE:HEI) gears up to release its third fiscal quarter earnings, the company's financial health and stock performance are under close scrutiny by investors. According to InvestingPro data, HEICO boasts a robust market capitalization of $32.5 billion, underscoring its significant presence in the aerospace and electronics manufacturing industry. The company's revenue growth is particularly noteworthy, with a remarkable 41.13% increase over the last twelve months as of Q2 2024, indicating a strong upward trajectory in sales.

InvestingPro Tips reveal that HEICO has maintained its dividend payments for an impressive 49 consecutive years, signaling a commitment to returning value to shareholders. Additionally, analysts anticipate sales growth in the current year, which aligns with the company's reported revenue growth and may provide further confidence to investors considering the stock. With the stock trading at a high earnings multiple, with a P/E ratio of 56.93, investors are paying a premium for HEICO's earnings potential.

For those seeking more in-depth analysis, InvestingPro offers additional tips on HEICO, which can be accessed at https://www.investing.com/pro/HEI. These insights could be invaluable for investors looking to make informed decisions about their investments in HEICO as the company approaches its next earnings date on August 26, 2024.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

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