The firm said it lowered its rating on the company, which distributes and provides supply chain management services to the worldwide aerospace industry, based on weak fourth quarter results, which followed a surprising miss in the third quarter.
Barclays also said continual underperforming margins contributed to the downgrade.STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.
"All in all, we thought it was tough to find a silver lining in the quarter (and the suspension of management bonuses for 2014 would only seem to support this view), but it seems as if recent performance is driving management to take a much needed closer look at the business," the firm said.
Barclays lowered its price target on Wesco Aircraft to $16 from $24.
Separately, TheStreet Ratings team rates WESCO AIRCRAFT HOLDINGS INC as a Buy with a ratings score of B-. TheStreet Ratings Team has this to say about their recommendation:
"We rate WESCO AIRCRAFT HOLDINGS INC (WAIR) a BUY. This is driven by a number of strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its robust revenue growth, good cash flow from operations, growth in earnings per share and increase in net income. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- WAIR's very impressive revenue growth greatly exceeded the industry average of 29.4%. Since the same quarter one year prior, revenues leaped by 71.8%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- Net operating cash flow has increased to $36.14 million or 45.08% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 31.67%.
- WESCO AIRCRAFT HOLDINGS INC's earnings per share improvement from the most recent quarter was slightly positive. 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, WESCO AIRCRAFT HOLDINGS INC increased its bottom line by earning $1.09 versus $0.96 in the prior year. This year, the market expects an improvement in earnings ($1.31 versus $1.09).
- The company, on the basis of net income growth from the same quarter one year ago, has significantly underperformed compared to the Transportation Infrastructure industry average, but is greater than that of the S&P 500. The net income increased by 6.5% when compared to the same quarter one year prior, going from $27.03 million to $28.77 million.
- The debt-to-equity ratio of 1.17 is relatively high when compared with the industry average, suggesting a need for better debt level management. Regardless of the company's weak debt-to-equity ratio, WAIR has managed to keep a strong quick ratio of 1.87, which demonstrates the ability to cover short-term cash needs.
- You can view the full analysis from the report here: WAIR Ratings Report