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Heico's Recent Pullback May Offer Attractive Point Of Entry

Heico Corporation NYSE:HEI - Heico's Recent Pullback May Offer Attractive Point Of Entry

Canaccord Genuity believes that the recent pull back in Heico Corp HEI 0.93% shares presents an attractive entry point. Therefore, the analysts reiterated a Buy rating and target price of $82 on the company's shares.

After the company delivered its quarterly results on August 24, the stock lost more than 8 percent. In comparison, its peers advanced 1 percent on average.

On top of this, the brokerage pointed out a few downgrades after the company announced its third-quarter results, mainly on valuation and concerns on outlook for organic growth. However, the lead analyst likes Heico for the simple reason of "improving commercial aftermarket fundamentals."

The analysts are also looking at the possibility of rapid growth next year. Therefore, the lead analyst thinks any pullback could be used as a buying opportunity or entry point into Heico shares.

In a research note to clients, the brokerage said, "HEI is expected to provide its initial FY17 guidance when it reports its 2016 results in mid-December 2016. Considering the outlook for the ETG segment will be lumpy, the focus is on the organic growth in the FSG segment, where HEI has most of its commercial aerospace aftermarket exposure. In each of the last three years HEI has provided initial earnings guidance of up 8–10 percent."

Canaccord continued to repose confidence in the company for the rapid growth next year and believes the set up for the stock is more opportune for a favorable upside.

At time of writing, the stock fell $0.36, or 0.53 percent, to $68.05.

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DateFirmActionFromTo
Aug 2016Bank of AmericaDowngradesBuyNeutral
Aug 2016KeyBancDowngradesOverweightSector Weight
Aug 2016Credit SuisseMaintainsNeutral

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