Heico Corporation (NYSE:HEI) has experienced a shift in market sentiment as Wall Street Zen downgraded its rating from “buy” to “hold.” This adjustment was announced in a report released on the morning of October 7, 2023, reflecting a broader reassessment of the company’s stock by various analysts in recent weeks.
A series of updates from notable financial institutions further illustrates the evolving perspective on Heico. On August 27, 2023, UBS Group raised its price target for Heico from $346.00 to $375.00, designating the stock with a “neutral” rating. Similarly, Truist Financial increased its price target from $352.00 to $366.00, maintaining a “buy” rating on the aerospace company’s shares. On the same day, Royal Bank of Canada set a target price of $350.00, while The Goldman Sachs Group reaffirmed its “buy” rating and adjusted its target price to $382.00, up from $337.00. Currently, ten analysts have rated the stock as a buy, while eight have assigned a hold rating, resulting in a consensus rating of “Moderate Buy” and an average target price of $343.62, according to MarketBeat.com.
Heico announced its latest quarterly earnings results on August 25, 2023, reporting earnings per share of $1.26, exceeding the consensus estimate of $1.12 by $0.14. The company achieved a return on equity of 16.29% and a net margin of 14.96%. Revenue for the quarter reached $1.15 billion, surpassing the expected $1.11 billion. This marks a significant year-over-year revenue increase of 15.7%, up from $0.97 earnings per share in the same quarter of the previous year. Analysts predict that Heico will report an EPS of 4.2 for the current fiscal year.
Insider Activity and Hedge Fund Movements
In related news, Heico’s Director, Mark H. Hildebrandt, purchased 676 shares of the company’s stock on October 10, 2023, at an average price of $243.93 per share, totaling approximately $164,896.68. Following this acquisition, Hildebrandt holds 49,423 shares, valued at around $12,055,752.39, reflecting a 1.39% increase in his position. Another Director, Carol F. Fine, bought 672 shares on the same day, also at an average price of $243.93, amounting to $163,920.96. This transaction increased her holdings to 672 shares. In total, insiders acquired 4,448 shares valued at $1,086,933 in the last quarter, with corporate insiders holding 9.55% of the company’s stock.
Several hedge funds have made significant adjustments to their positions in Heico recently. Congress Asset Management Co. increased its stake by 366.0% during the second quarter, owning 308,457 shares valued at $101,174,000 after acquiring an additional 242,264 shares. American Century Companies Inc. also raised its holdings by 45.7% in the third quarter, now owning 769,704 shares valued at $248,476,000. Other notable transactions include Munro Partners purchasing a new stake valued at approximately $59,720,000 and Mackenzie Financial Corp acquiring another stake worth about $40,949,000. Collectively, hedge funds and institutional investors hold 27.12% of Heico’s total stock.
Understanding Heico Corporation
HEICO Corporation operates through its subsidiaries, focusing on the design, manufacture, and sale of aerospace, defense, and electronic-related products and services in both the United States and international markets. Its Flight Support Group segment specializes in providing jet engine and aircraft component replacement parts, thermal insulation systems, and various specialty components.
As analysts continue to adjust their perspectives on Heico, the company remains a significant player in the aerospace sector. Investors will be closely watching further developments and earnings reports as the fiscal year progresses.
