Jefferies raises HEICO stock price target to $340, maintains buy

On Thursday, Jefferies analyst Sheila Kahyaoglu increased the price target for HEICO shares, listed on the New York Stock Exchange (NYSE:HEI), to $340 from the previous target of $320, while sustaining a Buy rating on the stock. The adjustment follows HEICO’s reported substantial organic growth and margin expansion. The stock has shown impressive momentum, delivering a 38.29% return over the past year and currently trading near its 52-week high of $297.41. According to InvestingPro analysis, the stock appears to be trading above its Fair Value, with 17 additional key insights available to subscribers.

HEICO, a prominent player in the aerospace and electronics sectors, showcased an impressive 11% organic growth in the second fiscal quarter, contributing to a 12% organic growth for the first half of the fiscal year. The company’s strong performance is reflected in its robust 17.74% revenue growth over the last twelve months, with revenue reaching $4.13 billion. This growth was further bolstered by a 170 basis point expansion in margins, primarily driven by the Flight Support Group (FSG), which saw a 14% increase. The growth in FSG was attributed to continued momentum in the aftermarket and missile defense segments. InvestingPro data shows HEICO maintains a healthy financial position with a current ratio of 3.43, indicating strong liquidity.

In response to these results, Kahyaoglu has revised the fiscal year 2025 earnings per share (EPS) estimate upwards to $4.50 from $4.45. This revision is based on an anticipated 10% organic growth for the year while incorporating a degree of caution regarding the FSG’s performance. Kahyaoglu notes that for every 2 percentage points of growth in FSG, there is an associated $4 increase in HEICO’s share value, given the current forward year 2 price-to-earnings ratio.

The analyst’s comments provide insight into the factors influencing the price target adjustment. The increase reflects confidence in HEICO’s continued growth trajectory and the company’s ability to leverage its market positions in both aftermarket services and missile defense systems. For deeper insights into HEICO’s valuation and growth prospects, investors can access the comprehensive Pro Research Report available exclusively on InvestingPro, which covers detailed analysis of 1,400+ top US stocks.

HEICO’s financial performance and the analyst’s subsequent price target raise indicate a positive outlook for the company’s stock as it continues to execute its growth strategy in the aerospace and electronics industries. The updated EPS forecast and the new price target suggest that Jefferies anticipates HEICO to maintain its growth momentum and profitability in the coming years.

In other recent news, HEICO Corporation reported impressive second-quarter fiscal 2025 earnings, surpassing analyst expectations with earnings per share (EPS) of $1.12, higher than the forecasted $1.03. The company also exceeded revenue projections, achieving $1.1 billion against an anticipated $1.06 billion. This strong performance was driven by significant growth in both its Flight Support Group and Electronic Technologies Group, along with strategic acquisitions such as Rosen Aviation LLC. Vertical Research Partners responded by raising HEICO’s stock price target to $320, maintaining a Buy rating due to the robust earnings and the company’s strategic initiatives in mergers and acquisitions. Analyst Robert Stallard from Vertical Research noted the Flight Support Group’s market share gains and consistent margin contributions as key factors in the company’s success. Despite lighter margins in the Electronic Technologies Group, Stallard remains optimistic about HEICO’s overall margin performance. The company’s decentralized business model and strategic acquisitions have been pivotal in its growth, with a notable 27% increase in net income to $156.8 million. HEICO continues to project mid to high single-digit growth for the year, focusing on strategic acquisitions and product innovation to drive long-term success.

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