Jefferies raises Loar Holdings price target to $110, maintains Buy

On Thursday, Jefferies analyst Sheila Kahyaoglu increased the price target for Loar Holdings Inc (NYSE: LOAR) shares to $110 from the previous $95, while reiterating a Buy rating on the stock. The company, currently valued at $7.8 billion, has seen its stock price decline by nearly 14% over the past week, though it maintains an impressive 67% gain over the last year according to InvestingPro data. The adjustment follows Loar’s reported first-quarter results, which showcased a significant 11% organic growth and a 22% increase in operating profit. This performance was largely attributed to a robust 33% growth in the Defense sector and a notable expansion in EBITDA margins by approximately 170 basis points year-over-year.

Kahyaoglu’s analysis pointed out that the improved margins were partly due to a roughly 210 basis point contribution from Applied Avionics, despite being somewhat offset by product mix changes. The company maintains impressive gross profit margins of 51%, as reported by InvestingPro, demonstrating strong pricing power in its market segments. The firm’s organic growth was particularly strong in the Defense segment, which outperformed previous expectations by increasing 22%, compared to the prior forecast of 20%. The Aftermarket sector also reported an 11% growth, consistent with previous figures and aligning with the lower double-digit guidance.

In light of the first-quarter achievements, Jefferies has revised its 2025 earnings per share (EPS) estimate for Loar Holdings upward to $0.74, a slight increase from the former estimate of $0.71. According to InvestingPro, which offers comprehensive analysis through its Pro Research Reports covering 1,400+ stocks, the company appears overvalued compared to its Fair Value, despite strong fundamentals and analyst optimism. InvestingPro subscribers have access to 13 additional key insights about LOAR that could help inform investment decisions. This revision reflects both the quarter’s performance and the anticipated higher contributions from acquisitions.

Loar Holdings’ solid quarterly report, characterized by organic growth and profit increase, has led to a positive outlook from Jefferies, with expectations of sustained growth and profitability for the company moving forward. The raised price target to $110 signifies confidence in Loar’s ongoing performance and strategic initiatives.

In other recent news, Loar Holdings Inc. reported impressive first-quarter earnings, surpassing analyst expectations. The aerospace and defense supplier announced adjusted earnings per share of $0.20, exceeding the consensus estimate of $0.19. Revenue for the quarter reached $114.7 million, marking a 24.8% increase from the previous year. Despite these positive results, Loar’s stock experienced a decline of 4.4%. The company has raised its full-year 2025 guidance, now projecting net sales between $482 million and $490 million and adjusted EBITDA between $182 million and $185 million. Loar Holdings recorded a net income of $15.3 million, a substantial rise from $2.2 million in the same period last year. Adjusted EBITDA grew by 30.6% to $43.1 million, continuing a trend of 11 consecutive quarters of growth. The company also highlighted strong demand across its markets, contributing to operating cash flow of $28.4 million for the quarter.

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