William Blair analyst Louie DiPalma has reiterated their bullish stance on HEI stock, giving a Buy rating yesterday.
Louie DiPalma has given his Buy rating due to a combination of factors including HEICO’s impressive financial performance and strategic positioning. The company reported robust first-quarter results that surpassed market expectations, with notable organic growth in both its Flight Support Group (FSG) and Electronic Technologies Group (ETG). The FSG experienced a growth acceleration to 13%, while the ETG rebounded from a previous decline to an 11% growth, supported by a strong backlog and optimistic management outlook.
Additionally, HEICO’s operating margins have improved significantly, with the FSG and ETG segments expanding by 130 and 380 basis points, respectively. The global demand for commercial and business travel remains strong, and HEICO is strategically positioned to benefit from governmental cost efficiency initiatives, particularly with its PMA parts offering. The company’s PMA revenue currently represents a small share of the aftermarket components market, indicating substantial growth potential. DiPalma anticipates a 15% annual upside in shares driven by EBITDA growth, reinforcing his positive outlook and Buy rating.
In another report released yesterday, Jefferies also maintained a Buy rating on the stock with a $305.00 price target.