UBS reiterated its $382 price target on HEICO Corp. after the aerospace and defense supplier reported quarterly results that surpassed analyst expectations across key financial metrics.
The company’s revenue exceeded estimates by 5%, while earnings before interest and taxes came in 11% above forecasts. Organic growth totaled 14%, driven by a 12% increase in the Flight Support Group and an 18% expansion in the Electronic Technologies Group. Operating margins improved by 200 basis points to 25.1%, beating estimates by 140 basis points.
Free cash flow reached $345 million, exceeding the consensus estimate of $210 million. Net leverage declined to less than 1.6 times, down from 1.7 times in the prior quarter. HEICO also raised its semiannual dividend by 8%, increasing it from $0.12 to $0.13 per share, marking 51 consecutive years of dividend payments.
The company expanded its unsecured revolving credit facility by $200 million to $2.2 billion, with the maturity extended to 2031. Recent acquisitions, including a 90% stake in CalRamic Technologies via Exxelia and the purchase of Cook Defence Systems, are expected to contribute to earnings within a year.
Management reported no signs of weakening commercial aftermarket demand or negative impacts from elevated oil prices. Demand remained robust across Flight Support product lines, supported by continued strength in aerospace, defense, and electronics sectors.
