NEW YORK (TheStreet) -- Deutsche Bank maintained its "buy" rating of the "new" B/E Aerospace (BEAV) with a price target of $66, down from $91, following the spin-off of the company's consumable management segment.
"We continue to see fundamentals of strong airline profitability and air traffic growth driving mid-to-high SD top-line growth alongside steady margin expansion," Deutsche Bank said.
Analysts said that the spin-off of KLX (KLXI) from the company makes for a much "cleaner story" for BEAV, as it becomes a pure-play to commercial aerospace with uniquely high exposure to commercial aerospace aftermarket, which comprises 40% of sales.
That exposure should help the company sustain its multiple even as new OEM production decelerates into 2017, analysts noted.
Additionally, following the divestiture of the consumables business, BEAV's cash flow conversion should improve from the 75% conversion of net income in 2015 toward 100% by 2017, Deutsche Bank said.
Shares of B/E Aerospace closed up 4.06% at $58.40 yesterday.
Separately, TheStreet Ratings team rates B/E AEROSPACE INC as a Buy with a ratings score of B+. TheStreet Ratings Team has this to say about their recommendation:
"We rate B/E AEROSPACE INC (BEAV) a BUY. This is driven by multiple 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, growth in earnings per share, good cash flow from operations, increase in net income and expanding profit margins. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself."