1-Star Price
INVESTOR
5-Star Price
INVESTOR
Economic Moat
INVESTOR
Capital Allocation
INVESTOR
Narrow-moat-rated Heico posted record operating income as increased global flight activity drove demand for aircraft maintenance, repair, and overhaul. Sales of $539 million and earnings per share of $0.62 beat FactSet consensus by 1.4% and 1.1%, respectively. After adjusting our model for fiscal second-quarter earnings, we are increasing our fair value estimate for Heico to $97 per share from $96.
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 growth.
