HEICO: Mayday! Mayday! Mayday!
Lester Goh • 19 Comments
Lester Goh • 19 Comments
HEICO Appears Poised For Its Next Leg Up
Alpha Gen Capital
Alpha Gen Capital
Sat, Oct. 8, 8:25 AM
- “This is the bottom” for Honeywell's (NYSE:HON) businesses exposed to the oil and gas industries, but troubles in the business jet industry “will get worse” next year, CEO David Cote said Friday, a day after the company cut its earnings and sales forecast, causing shares to slide 7.5% in their worst showing in five years.
- "This was a surprise," says William Blair's Nick Heymann, as HON had been considered a safe-haven stock amid sluggish industrial growth, on Cote's reputation and record of delivering on profit targets.
- Morgan Stanley analyst Nigel Coe compared HON’s announcement to a “paella bowl” dropped in front of investors and said “credibility is becoming a growing issue.”
- Other analysts are more confident: J.P. Morgan's Steve Tusa says "it's not that bad in the grand scheme," noting that HON’s profits are off ~5% YTD, roughly in line with its industrial peers.
- “While this quarter and maybe next quarter look to be a little bit worse than anticipated, we still believe they’re well positioned long term to benefit from growth opportunities," according to Edward Jones' Jeff WIndau.
- HON supplies parts to Textron (NYSE:TXT) and General Dynamics (NYSE:GD), which fell a respective 3.6% and 0.8% yesterday, while aerospace parts makers Heico (NYSE:HEI), B/E Aerospace (NASDAQ:BEAV) and TransDigm (NYSE:TDG) each slid more than 1%; also, GE slipped 0.6%, United Technologies (NYSE:UTX) fell 1.5%, and Boeing (NYSE:BA) lost 0.4%.
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- Boeing (BA -0.8%) is ramping up its push into the spare parts business in its most aggressive move yet in the company’s years-long effort to assert control over distribution - and the resulting revenue - of spare parts, WSJ reports.
- The initial sale of a jetliner is a relatively smaller portion of the revenue that aircraft will generate during their multi-decade life, with the larger proportion of revenue on any single plane coming from the lifetime maintenance and parts shared across hundreds of companies; these parts at airlines and maintenance facilities can fetch up to 4.5x more than what Boeing pays for the parts during initial production, WSJ reports, citing a supply chain official.
- Boeing moves could have an outsized affect on Spirit AeroSystems (NYSE:SPR), one of its largest suppliers, but also could impact the likes of Heico (NYSE:HEI), TransDigm (NYSE:TDG), BE Aerospace (NASDAQ:BEAV), Astronics (NASDAQ:ATRO) and Rockwell Collins (NYSE:COL).
- Boeing’s costs must go down if Boeing has to compete with Airbus (OTCPK:EADSF, OTCPK:EADSY) and Bombardier (OTCQX:BDRAF, OTCQX:BDRBF) on price - including costs on spare parts and service - and every little bit will help, writes 24/7 Wall Street's Paul Ausick.
- Now read Time to buy Boeing despite the negative headlines
Thu, Feb. 25, 4:35 PM
- HEICO (NYSE:HEI): FQ1 EPS of $0.49
- Revenue of $306.22M (+14.2% Y/Y)
Wed, Feb. 24, 5:35 PM
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Dec. 31, 2015, 11:33 AM
- Canaccord Genuity's Ken Herbert is expecting a positive year (and another in 2016) for aerospace and defense stocks, with a look at the commercial OE cycle pointing to strong ratios and an election year boosting prospects.
- He sees a book-to-bill of about 1.4 based on commercial transport orders of about 1,900 this year, and a book-to-bill over 1 again in 2016.
- Since 1992, Herbert notes, defense stocks have outperformed the broad market by 17% in election years.
- Heading into next year, his top stock is Spirit AeroSystems Holdings (SPR +0.6%), which he says is further along in restructuring and cost control than peers; he rates it Buy with a $70 price target (42% upside).
- Overall, the firm feels positive defense sentiment bodes best for Rockwell Collins (COL -1.3%; 14% upside in $105 target), Boeing (BA -1%; 14% upside in $165 target), Esterline Technologies (ESL -1.3%; 36% upside in $110 target) and Triumph Group (TGI -0.7%; 36% upside in $54 target).
- An increase in aircraft maintenance spending would most benefit TransDigm Group (TDG -0.2%) and Heico (HEI -0.7%). Meanwhile, Rockwell Collins, Esterline, Triumph, B/E Aerospace (BEAV -1.1%) and Ducommun (DCO -0.6%) will be launching or accelerating restructurings in the coming year.
Dec. 22, 2015, 10:48 AM
Dec. 21, 2015, 8:59 AM| Dec. 21, 2015, 8:59 AM | 1 Comment
Dec. 15, 2015, 4:18 PM
- HEICO (NYSE:HEI): FQ4 EPS of $0.56 vs. $0.48 in 4Q14
- Revenue of $328.7M (+12.5% Y/Y)
Dec. 14, 2015, 5:35 PM
Dec. 14, 2015, 3:21 PM
- HEICO (NYSE:HEI) declares $0.08/share semi-annual dividend, 14% increase from prior dividend of $0.07.
- Forward yield 0.33%
- Payable Jan. 19; for shareholders of record Jan. 4; ex-div Dec. 30.