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Investing.com - Stifel initiated coverage of aerospace and electronics company HEICO (NYSE:HEI) with a buy rating and a $352 price target on Monday. According to InvestingPro analysis, HEICO’s stock appears undervalued, with the company maintaining strong financial health metrics and a solid 20% return on equity.
The research firm cited "continued solid operations and ongoing momentum" across HEICO’s portfolio as key factors supporting its positive outlook on the stock.
Stifel’s price target represents a 36x multiple applied to its fiscal year 2027 EBITDA estimate, discounted back one year. This multiple is higher than HEICO’s pre-COVID trading levels but aligns with the company’s valuation over the past four years.
The firm identified several potential downside risks to its investment thesis, including a downturn in the commercial aerospace cycle, changes to government spending patterns, and challenges with acquisition sourcing and integration.
Additional risks noted by Stifel include contract costs exceeding estimates and possible failures to improve product offerings through HEICO’s internal development programs.
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