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Heico Corp HEI

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1-Star Price

PREMIUM

5-Star Price

PREMIUM

Economic Moat

PREMIUM

Capital Allocation

PREMIUM

Nascent Commercial Aftermarket Recovery Benefitted Heico During Fiscal Second Quarter; Raising FVE

Burkett Huey, CFA Equity Analyst

Analyst Note

| Burkett Huey, CFA |

Narrow-moat-rated Heico reported substantial improvement during its fiscal second quarter as the commercial aviation recovery began taking root with leisure travel in the U.S. and Asia this quarter. Despite top line and operating income improvement, Heico posted sequentially flat net earnings of $0.51 per share, due to abnormally low taxes in the prior quarter resulting from stock option exercises. We are increasing our fair value estimate for the firm to $91 per share from $90, but we still see the stock as substantially overvalued.

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Company Profile

Business Description

Heico is an aerospace and defense supplier that primarily focuses on creating niche replacement parts for commercial aircraft and components for defense products. In commercial aerospace, Heico is the largest independent producer of replacement parts for aircraft, primarily within the engine. In the defense market, the company produces niche subcomponents used in targeting technology as well as simulation equipment, among other things. The company is highly acquisitive, focusing on companies that are generating strong cash flow with the potential for sustainable growth.

Contact
3000 Taft Street
Hollywood, FL, 33021
T +1 954 987-4000
Sector Industrials
Industry Aerospace & Defense
Most Recent Earnings Apr 30, 2021
Fiscal Year End Oct 31, 2021
Stock Type Cyclical
Employees 5,200

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