Credit Suisse Reiterates Outperform Rating, Lowers Price Target On B/E Aerospace After Low Watermark In Q4

In a report published Friday, Credit Suisse analyst Robert Spingarn reiterated an Outperform rating on B/E Aerospace Inc (NASDAQ: BEAV), but lowered the price target from $68.05 to $68.00.

In the report, Credit Suisse noted, “BEAV reported a somewhat disappointing Q4 with flat CAS sales and a 3rd quarter of underwhelming BJS margins resulting in EPS of $0.57, a 4-cent miss vs. our estimate of $0.61. Investors are not yet used to considering BEAV on a stand-alone basis (ex. KLX), and even the appearance of soft performance likely gives the market some pause, especially after such a strong run through the cycle. However, management sounded confident in the outlook for 2015 and reaffirmed guidance (EPS of $3.00, or 20% growth Y/Y), which we believe to be typically conservative (BEAV has beat initial guidance by ~25% in each of the last 3 years) and mgmt. even acknowledged that the guided operating margin of 18% is a floor. We remain enthusiastic regarding BEAV shares as we continue to like the significant content expansion story, which will now be supplemented by an improved cash generation profile and shareholder returns. Our 2015-17 EPS estimates rise to $3.13/$3.66/$4.18 (from $3.11/$3.61/$4.12).”

B/E Aerospace closed on Thursday at $58.10.