Why Heico Stock Eked out a Stock Market Beat on Thursday

Heico (NYSE: HEI), a manufacturer of electrical components for a variety of industries including aerospace, was the subject of several positive analyst updates on Thursday. This pushed the company's stock higher by just under 2% on the day, which easily exceeded the 0.3% rise of the benchmark S&P 500 index.

Price target upticks

Those updates were published in the wake of Heico's rather encouraging earnings report for the second quarter of fiscal 2025, unveiled after market close on Tuesday. The quarter saw the company post a new record net sales figure, not to mention double-digit increases in key fundamentals. It also beat the consensus analyst estimates on both the top and bottom lines.

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On Friday, several of those analysts saw fit to raise their Heico price targets. Among these was Jefferies' Sheila Kahyaoglu, who now feels the stock is worth $340 per share -- up from her previous fair value assessment of $320. She also believes it's still a buy, as she maintained her existing recommendation.

According to reports, Kahyaoglu waxed bullish about the company's solid sales growth figures, and its impressive margin expansion. She pointed out that the critical flight support group division was largely responsible for this, with its 14% year-over-year growth.

Flying confidently into the future

Peer analysts also sounded positive notes on other aspects of Heico's operations. Vertical Research Partners' Robert Stallard, in lifting his price target on the stock to $320 per share from $265 and maintaining his buy recommendation, complimented the mergers and acquisitions strategy that has helped it bulk up the fundamentals, according to reports.

With demand for aircraft robust and Heico well positioned to take advantage of this, I'd agree with those pundits that the company's stock is a buy. It is fairly expensive on certain valuations, however, so would-be investors need to take that into consideration.

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Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Jefferies Financial Group. The Motley Fool recommends Heico. The Motley Fool has a disclosure policy.