HEICO Corporation designs, manufactures, and sells aerospace, defense, and electronic related products and services in the United States and internationally. The company was founded in 1949 and is based in Hollywood, Florida.
HEI Price Forecast Based on DCF Valuation
DCF Fair Value Target:
We started the process of determining a valid price forecast for Heico Corp with a discounted cash flow analysis -- the results of which can be found in the table below. To summarize, we found that Heico Corp ranked in the 37th percentile in terms of potential gain offered. We should note, though, that the most conservative analysis suggests this stock will yield negative results -- and thus may be a potential short opportunity. As for the metrics that stood out in our discounted cash flow analysis of Heico Corp, consider:
The stock's equity weight, or the proportion of capital from equity relative to debt, is 95. Its equity weight surpasses that of 88.99% of free cash flow generating stocks in the Industrials sector.
The business' balance sheet suggests that 5% of the company's capital is sourced from debt; this is greater than only 14.81% of the free cash flow producing stocks we're observing.
HEI's estimated cost of debt, based largely on its market capitalization and its interest coverage ratio, is 2%; for context, that number is higher than 47.11% of tickers in our DCF set.
Terminal Growth Rate in Free Cash Flow
Return Relative to Current Share Price
Want more companies with a valuation profile/forecast similar to that of Heico Corp? See FLS, RTX, CP, RRD, and CHRW.
Shares of Heico (NYSE: HEI) fell 12.7% in the first half of 2020, according to data provided by S&P Global Market Intelligence, as the aerospace component manufacturer was dragged down by the COVID-19 pandemic and its impact on airlines. It could have been worse: Heico held up relatively well compared to Boeing (NYSE: BA) and even TransDigm Group (NYSE: TDG), which is often cited as Heico's best comparison. Airlines have had a tough time managing through the pandemic, which has caused travel demand to plummet.
The S&P 500 managed to gain almost 2% last week, buoyed by the reopening of various states and even certain counties in California. The county I live in opened restaurants, bars, and salons last week, essentially leapfrogging into an expanded stage 2 reopening as laid out in California’s reopening road...
Shares of Boeing (NYSE: BA) jumped 9% at the open and were up more than 4% as of noon Tuesday, rallying on positive news both concerning the economy and the COVID-19 pandemic. A number of commercial aerospace suppliers were in rally mode as well, with Triumph Group (NYSE: TGI) up 8% as of midday and Heico (NYSE: HEI) up more than 2% after opening up 5%.
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HEICO's (HEI) Flight support group acquired 70% of naval hydraulic systems specialist Rocky Mountain Hydrostatics, LLC in an all-cash transaction.Financial terms were not disclosed.Rocky Mountain was founded in 1991 by Bradley and Therese Zuercher. Mr. Zuercher will continue to lead Rocky Mountain, and will retain 30% ownership.Rocky Mountain customers include...