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Will This Price Target Increase Help BE Aerospace (BEAV) Today?

Stocks in this article: BEAV

Story updated at 10 a.m. to reflect market activity.

NEW YORK (TheStreet) -- KeyBanc raised its price target for BE Aerospace (BEAV) to $108 from $94 Thurday.

Shares of BE Aerospace gained 0.5% to $88.71 in morning trading.

The bank maintained its "buy" rating for the stock." Analysts Michael F. Ciarmoli and Kevin Ciabattoni also raised EPS estimates for 2014 and 2015 for the company. Both the raised price target and raised estimates were driven by continued strength in bookings.

"Given the recent noise surrounding the Company's oil and gas diversification strategy and what some investors argue is a stretched valuation, we thought it made sense to revisit the most compelling component of our investment thesis on BEAV shares - growth expectations in the aircraft seating (and interiors) market in the coming years," the analysts wrote. "We also thought it made sense to highlight the stock ahead of next week's MRO America Conference and Hamburg Interiors Expo."

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TheStreet Ratings team rates B/E AEROSPACE INC as a Buy with a ratings score of A. TheStreet Ratings Team has this to say about their recommendation:

"We rate B/E AEROSPACE INC (BEAV) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its revenue growth, impressive record of earnings per share growth, expanding profit margins, solid stock price performance and notable return on equity. We feel these strengths outweigh the fact that the company shows weak operating cash flow."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • BEAV's revenue growth has slightly outpaced the industry average of 7.2%. Since the same quarter one year prior, revenues rose by 12.4%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • B/E AEROSPACE INC has improved earnings per share by 19.2% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, B/E AEROSPACE INC increased its bottom line by earning $3.52 versus $2.27 in the prior year. This year, the market expects an improvement in earnings ($4.34 versus $3.52).
  • 40.44% is the gross profit margin for B/E AEROSPACE INC which we consider to be strong. It has increased from the same quarter the previous year. Along with this, the net profit margin of 10.03% is above that of the industry average.
  • Investors have apparently begun to recognize positive factors similar to those we have mentioned in this report, including earnings growth. This has helped drive up the company's shares by a sharp 44.07% over the past year, a rise that has exceeded that of the S&P 500 Index. We feel that the stock's sharp appreciation over the last year has driven it to a price level which is now somewhat expensive compared to the rest of its industry. The other strengths this company shows, however, justify the higher price levels.
  • The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Aerospace & Defense industry and the overall market on the basis of return on equity, B/E AEROSPACE INC has underperformed in comparison with the industry average, but has exceeded that of the S&P 500.
  • You can view the full analysis from the report here: BEAV Ratings Report

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Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.

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