Aerospace Industry Revival Favors These Two Stocks, Analysts Highlight Upswing Potential
Portfolio Pulse from Anusuya Lahiri
Stifel analyst Bert W. Subin initiated coverage on six commercial aerospace companies, favoring Boeing Co (BA) and Hexcel Corp (HXL) with Buy ratings and strong price targets. Subin sees the aerospace industry shifting to mid-cycle, benefiting OEMs and suppliers like BA and HXL due to rising aircraft production. Boeing is expected to experience significant Free Cash Flow growth, while Hexcel is well-positioned due to its diverse exposure. Transdigm Group Inc (TDG) and Spirit Aerosystems Holdings, Inc (SPR) received Hold ratings, with TDG's growth moderated by higher interest rates and SPR improving its capital structure. Heico Corp (HEI) is expected to see margin and earnings growth, and AAR Corp (AIR) is anticipated to benefit from strong aftermarket services demand.

December 01, 2023 | 6:34 pm
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NEUTRAL IMPACT
Spirit Aerosystems Holdings, Inc (SPR) was given a Hold rating and a price target of $28 by Stifel. The company's recent Memorandum of Agreement with Boeing and capital structure changes are seen as positive developments.
Spirit Aerosystems' Hold rating and moderate price target, along with recent positive developments, suggest a neutral short-term impact on the stock.
CONFIDENCE 65
IMPORTANCE 55
RELEVANCE 65
NEUTRAL IMPACT
Transdigm Group Inc (TDG) received a Hold rating from Stifel, with a price target of $1,000. The company's growth may be moderated by higher interest rates and a shift toward OEM sales.
Transdigm's Hold rating and the cautious outlook on growth due to macroeconomic factors and sales mix suggest a neutral short-term impact on the stock price.
CONFIDENCE 70
IMPORTANCE 60
RELEVANCE 70
POSITIVE IMPACT
AAR Corp (AIR) was initiated with a Buy rating and a price target of $80 by Stifel. The company is anticipated to benefit from continued strength in aftermarket services demand.
AAR Corp's Buy rating and optimistic price target, coupled with strong aftermarket services demand, indicate a positive short-term impact on the stock.
CONFIDENCE 70
IMPORTANCE 65
RELEVANCE 75
POSITIVE IMPACT
Boeing Co (BA) received a Buy rating and a price target of $265 from Stifel analyst Bert W. Subin, indicating a positive outlook for the company's Free Cash Flow growth and demand for new aircraft.
Boeing's Buy rating and high price target reflect analyst confidence in the company's upcoming Free Cash Flow growth and strong demand for new aircraft, which should positively impact the stock price in the short term.
CONFIDENCE 80
IMPORTANCE 85
RELEVANCE 90
POSITIVE IMPACT
Heico Corp (HEI) received a Buy rating and a price target of $200 from Stifel. The company is expected to see margin, earnings, and Free Cash Flow upside in 2024-25, driven by potential price increases.
Heico's Buy rating and positive price target, along with the potential for margin and earnings growth from price increases, suggest a positive short-term impact on the stock.
CONFIDENCE 70
IMPORTANCE 70
RELEVANCE 75
POSITIVE IMPACT
Hexcel Corp (HXL) was initiated with a Buy rating and a price target of $83 by Stifel analyst Bert W. Subin, highlighting the company's diverse exposure across commercial aerospace and potential benefits from the resurgence in international travel.
Hexcel's positive rating and price target are based on its broad exposure to the commercial aerospace sector and the expected increase in international travel, suggesting a favorable short-term outlook for the stock.
CONFIDENCE 75
IMPORTANCE 80
RELEVANCE 85