"We believe the sale or spin-off of Consumables Management is the most likely outcome of BEAV's review of strategic alternatives...current levels reflect a middle of the range valuation for CMS with modest upside potential to $105-$110 per share.," their note said.
We think sale of the entire company could yield upside to $120, we see this as less likely and as a result are downgrading BEAV," the note added.
The shares closed slightly higher yesterday.
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, compelling growth in net income, solid stock price performance and expanding profit margins. 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:
- The revenue growth came in higher than the industry average of 3.2%. Since the same quarter one year prior, revenues rose by 20.1%. 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 20.7% 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 ($4.36 versus $3.52).
- The net income growth from the same quarter one year ago has significantly exceeded that of the Aerospace & Defense industry average, but is less than that of the S&P 500. The net income increased by 21.2% when compared to the same quarter one year prior, going from $89.90 million to $109.00 million.
- 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 56.66% 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.
- 40.03% is the gross profit margin for B/E AEROSPACE INC which we consider to be strong. Regardless of BEAV's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, BEAV's net profit margin of 10.77% compares favorably to the industry average.
- You can view the full analysis from the report here: BEAV Ratings Report