HEICO's Fiscal Q2 Growth, Margin Performance Due to Market Share Gains, New Product Development, RBC Says
HEICO's (HEI) fiscal Q2 growth and margin performance was due to continued market share gains, new product development and pricing, RBC Capital Markets said in a Thursday research note.RBC said that the highlight of Q2 was the margins, with the company's Flight Support Group segment posting margins of over 26%, with the company calling out a 60 basis points of margin benefit from the accelerated shipment of some defense products.Meanwhile, the Electronic Technologies Group posted segment margins of 26.5%, well ahead of expectations after the sub-20% margins in Q1, the note said.RBC said that the company's strong balance sheet position provides significant mergers and acquisition capacity, and that it continues to view incremental M&A as positive for sentiment, with a larger transaction expected to a positive for the stock.RBC raised its price target on the company's stock to $390 from $375 and maintained its outperform rating.Price: $351.15, Change: $+6.08, Percent Change: +1.76%