Analysts Weigh in After B/E Aerospace Begins Exploring Sale

NEW YORK (TheStreet) -- Shares of B/E Aerospace (BEAV)are climbing after the company announced that it was exploring strategic alternatives, including a possible sale of the company. Analysts at Jefferies and Deutsche Bank had very different outlooks on the company following the news.

WHAT'S NEW:

B/E Aerospace yesterday said that it would explore strategic alternatives meant to increase shareholder value. The company stated that it could elect to sell itself, or spin-off or sell a number of its businesses. Other strategic transactions may also be pursued, added the company, which noted that it had hired Citigroup (C) as its financial advisor and Shearman & Sterling as its legal advisor in connection with this process.

ANALYST REACTION:

B/E Aerospace could be sold for about $107 per share, wrote Jefferies analyst Howard Rubel in a note to investors earlier today. The company could appeal to a strategic partner because of recent innovations that have enabled it to increase its market share, according to Rubel. Moreover, B/E Aerospace has strong relationships with its customers and is benefiting from the growing importance that airlines attach to the interior of their planes, added the analyst, who increased his price target on the shares to $107 from $85 and kept a Buy rating on the stock. Another firm, FBR Capital, said it views B/E Aerospace as a "very attractive asset" since it is the market leader in both the commercial aerospace OEM supply-chain and aftermarket end-markets. The firm thinks both strategic buyers and private equity could be interested and said it can "easily see" a multi-bidder situation developing now that the company is exploring alternatives. FBR has an Outperform rating on the stock. Conversely, Deutsche Bank analyst Myles Walton wrote that an acquisition of B/E Aerospace would be quite expensive and that potential acquirers may find it difficult to make such a purchase profitable. Additionally many companies that could potentially buy B/E Aerospace - including GE (GE), Honeywell (HON), and United Technologies (UTX) - would not be interested in doing so, the analyst believes. Walton kept a Hold rating on B/E Aerospace.

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