- PCP can increase revenues by 12% and EPS by 13%, on average, annually for the next five years. Given those estimates, the forward P/E ratio of 17.5x is too low.
- The commercial aerospace industry is in the growth phase of an airline order cycle; aging and fuel inefficient jet engines will continue to be replaced by modern technology.
- PCP has 50% more dollar content on new engine technology.
- The PCP business model features high levels of recurring revenue from replacement parts on existing jet and industrial gas turbine engines.
- By focusing on hard to replicate high-end content, PCP has high barriers to entry and enjoys a dominant market share in the areas it services.