Morgan Stanley: Aerospace Industry Remains Bullish; Raises Heico's (HEI.US) Target Price to $330

JT Financial APP has learned that Morgan Stanley analyst Kristine Liwag published a research report, raising Heico's (HEI.US) target price from $305 to $330 while maintaining the "Hold with Caution" rating. This upward revision reflects the strong performance of aerospace stocks - this sector currently has a historical high valuation multiple. Morgan Stanley believes that the expansion of valuation multiples demonstrates the industry's resilience and expects positive development trends to continue.

The analyst notes that Heico achieved record-breaking consolidated operating profit and net sales in the second quarter of fiscal year 2025, with year-over-year growth rates of 19% and 15%, respectively. The company's cash flow from operations increased by a significant 45%, reaching $2.047 billion. By business segment: the Aviation Support Business Unit saw a 19% increase in net sales to $7.671 billion; the Electronic Technology Business Unit saw a 7% increase in net sales to $3.422 billion.

However, note that risks include: potential reductions by US and overseas clients in defense, aerospace, or homeland security spending, which could impact company sales. Additionally, increased competition from existing competitors and new market entrants may lead to reduced market share. Technical difficulties in product development or manufacturing processes could also raise costs and delay delivery.

As understood, Heico primarily engages in the research, development, manufacture, and sale of aerospace, defense, and electronic-related products and services, with business spanning across the US and global markets.