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On Monday, Benchmark analyst Josh Sullivan reaffirmed a Buy rating on Bristow Group (NYSE:VTOL) shares, maintaining a $50.00 price target. With the stock currently trading near Fair Value according to InvestingPro analysis, Sullivan’s price target suggests a potential 40% upside. Sullivan’s analysis indicates that Bristow’s adjusted EBITDA estimate of $48 million aligns with consensus, and his forecast for fiscal year 2024 of $227 million is within the range of the company’s guidance of $220 million to $230 million.
Sullivan expects fiscal year 2025 to be transformative for Bristow, as the company is set to benefit from the $1.6 billion U.K. and approximately $700 million Irish Search and Rescue (SAR) programs. These initiatives are anticipated to add significant resilience and stability to Bristow’s business profile. InvestingPro data shows the company maintaining strong financial health with a current ratio of 1.83 and impressive revenue growth of 10.4% over the last twelve months. According to Sullivan, Bristow’s offshore vertical lift services are currently experiencing robust demand in a long-cycle environment, while aerospace original equipment manufacturers (OEMs) are slow to increase new supply.
The analyst also noted that Bristow’s financial focus is expected to transition from being perceived as a volatile energy sector player to a high-value, stable government contractor as the SAR operations expand in fiscal years 2025 and 2026. This shift is anticipated following the company’s investment in SAR assets, which includes a capital expenditure of $300 million for new helicopters. Sullivan believes that this investment will lead to an attractive free cash flow (FCF) profile for Bristow, with potential benefits for shareholders. Discover more insights about Bristow’s transformation potential and access detailed financial analysis in the comprehensive Pro Research Report, available exclusively on InvestingPro.
In other recent news, Bristow Group Inc. has secured additional financing to support its operations. The company recently borrowed an additional €6 million under its BLL Facilities Agreement, bringing the total borrowed to €99 million. This funding is part of a €100 million commitment aimed at acquiring new helicopters for search and rescue services in Ireland. Additionally, Bristow Group announced the successful drawdown of approximately £26 million from its senior secured term loan facility with National Westminster Bank Plc. This loan, part of a £55 million facility known as the "UKSAR Debt," was fully utilized as Bristow Helicopters Limited canceled the remaining commitments. Both financial maneuvers reflect Bristow Group’s strategic capital management and commitment to enhancing its service capabilities. These developments were disclosed in recent SEC filings and press release statements, ensuring transparency in the company’s financial activities.
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