Bernstein raises StandardAero stock target to $35 on strong outlook

On Thursday, Bernstein analyst Douglas Harned updated his assessment of StandardAero Inc (NYSE: SARO), increasing the price target from $30.00 to $35.00. The analyst continues to recommend an Outperform rating for the company’s shares. According to InvestingPro data, analyst targets now range from $28 to $37, with the stock currently trading at high earnings and EBITDA multiples. This adjustment reflects a heightened confidence in StandardAero’s long-term prospects, particularly considering the company’s robust performance in the last quarter of 2024 and its promising outlook for 2025.

StandardAero’s financial results for the fourth quarter, released after market close on March 10, 2025, surpassed expectations with revenues reaching $1.41 billion. This figure exceeded both the consensus estimate of $1.36 billion and Bernstein’s projection of $1.37 billion. The company’s adjusted EBITDA of $186 million also outperformed consensus and Bernstein’s estimate of approximately $170 million, with margins achieving 13.2%, which is 90 basis points above the estimated 12.3%. InvestingPro data shows the company’s trailing twelve-month revenue has grown by 14.8% to $5.24 billion, with a current gross profit margin of 14.4%.

The company’s EBITDA guidance for 2025 was approximately 3% higher than consensus estimates at the midpoint. Moreover, StandardAero’s commercial aero growth guidance, which ranges from low double digits to mid-teens, aligns with industry observations from GE and Safran (EPA:SAF), indicating a solid aftermarket for midlife aircraft. This supports Bernstein’s perspective on the enduring strength of the aftermarket sector. For deeper insights into StandardAero’s financial health and growth prospects, InvestingPro subscribers can access the comprehensive Pro Research Report, which includes detailed analysis of the company’s competitive position and growth drivers.

Following the announcement of the fourth-quarter earnings, StandardAero’s stock price experienced a significant rise, closing up 9% the next day. Currently trading with an EV/EBITDA multiple of 20.0x and maintaining a healthy current ratio of 1.95, the company shows strong liquidity. Harned’s increased price target is supported by an upward adjustment of the relative EV/EBITDA multiple to 12.1, up from the previous 10.6, reinforcing the analyst’s conviction in the company’s long-term growth trajectory.

In other recent news, StandardAero Inc. reported a strong financial performance for Q4 2024, with revenues increasing by 22% to $1.41 billion, surpassing analyst expectations. The company’s adjusted EBITDA also grew significantly, reaching $186 million, which was higher than anticipated. Analysts from Bernstein and JPMorgan maintained positive ratings on StandardAero, with Bernstein reiterating an Outperform rating and a $30.00 price target, while JPMorgan kept its Overweight rating with a $34.00 target. UBS raised its price target for StandardAero shares to $28.00, highlighting the company’s robust revenue growth and strategic investments in engine markets like CFM56 and CF34.

Despite a negative earnings per share of -$0.04, the market reacted positively, reflecting confidence in the company’s strategic initiatives and operational performance. StandardAero’s guidance for 2025 projects revenue between $5.8 billion and $5.95 billion, with adjusted EBITDA expected to range from $770 million to $790 million. The company is focusing on long-term growth through strategic investments and expanding its service agreements for LEAP engines. Analysts noted that while cash conversion fell short of expectations, StandardAero’s investments are aimed at fueling future growth, which could enhance investor confidence in the company’s long-term prospects.

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