BEAV

B/E Aerospace Inc

Industrial/Transportation


Presented:05/20/2016
Price:$46.58
Cap:$4.72B
Current Price:$64.47
Cap:$6.54B

Presented

Date05/20/2016
Price$46.58
Market Cap$4.72B
Ent Value$6.63B
P/E Ratio16.58x
Book Value$0.91
Div Yield0.02%
Shares O/S101.40M
Ave Daily Vol1,242,768
Short Int8.94%

Current

Price$64.47
Market Cap$6.54B
BE Aerospace, Inc. manufactures cabin interior products for commercial aircraft and business jets. The company also provides aircraft cabin interior reconfiguration, program management and certification services. The company operates its business through two segments: Commercial Aircraft and Business Jet segment. The Commercial Aircraft segment manufactures aircraft seats, offering a wide selection of first class, business class, tourist class and regional aircraft seats. Its products include seat frame, cushions, armrests and tray tables. The Business Jet segment offers product line of furnishings for business jets which includes jet seating and sofa products, electric fully berthing lie-flat seats, direct and indirect lighting, air valves and oxygen delivery systems as well as sidewalls, bulkheads, credenzas, closets, galley structures, lavatories, waste water systems and tables. BE Aerospace was founded by Amin J. Khoury and Robert J. Khoury in July 1987 and is headquartered in Wellington, FL.

Publicly traded companies mentioned herein: Airbus Group SE (AIR FP), B/E Aerospace Inc (BEAV), Boeing Co (BA), KLX Inc (KLXI), Zodiac Aerospace (ZC FP),

Highlights

The presenter is long shares of B/E Aerospace (BEAV) and believes there is an underappreciated market share opportunity for the company at the expense of its main competitor, Zodiac Aerospace, which has had a number of missteps recently. The risk/ reward and entry point are favorable now (at $46 - $47) after over one year of declines following the spin-off of KLX in December 2014. General aerospace cycle concerns, guidance hiccups, exposure to Russia and FX issues have all contributed to BEAV’s sub-par performance. Despite these issues, he sees BEAV as capable of growing its top line and EPS by mid single digits and double digits over the long run, respectively; and the company is a good way to play long term growth of revenue passenger miles. BEAV should earn nearly $4 per share in 2017, and growth is expected to accelerate from 2017 through 2019. A “reasonable” 15x multiple would put the value of the stock at $60+ within the next 12-18 months.

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Idea Discussion

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