B/E Aerospace (NASDAQ: BEAV) is a leading provider of aircraft cabin interior products for both commercial aircraft and business jets. Offerings include aircraft cabin seating, lighting, emergency oxygen systems, refrigeration equipment, galley structures, storage equipment and aerospace fasteners. The company also provides cabin interior design, reconfiguration and passenger-to-freighter conversion services. B/E sells its products to most major airlines and to manufacturers of aviation equipment. Its client list includes Boeing (NYSE: BA), UAL Corporation (NASDAQ: UAUA) and US Airways Group (NYSE: LCC).
The firm had good news for investors earlier in the week, when it reported Q2 EPS of 39 cents and revenues of $398.2 million. Analysts had been expecting 37 cents and $387 million. Management also guided FY07 EPS to $1.57 ($1.59 consensus), FY08 EPS to $2.25 ($2.17 consensus) and FY08 revenues to $2.0 billion ($1.91B consensus).
The news kept BEAV shares cycling through a positive five-month trading channel. The price is currently consolidating at the base of that channel, where oversold CCI, MACD, Momentum and Stochastic technical parameters suggest the potential for a rise back toward the top. The approximate correspondence of the stock's 50-day moving average to the base of the channel backs the rebound notion.
Brokers recommend the shares with six "strong buys," six "buys" and one "sell." Recent price targets are in the $51-55 range. Analysts expect a 45% growth rate, through the next year. The BEAV PEG ratio (1.22), Price to Book ratio (3.12), Sales Growth rate (46.67%) and EPS Growth rate (62.50%) compare favorably with industry, sector and S&P 500 averages.
Institutional investors hold about 95% of the outstanding shares. Over the past 52 weeks, the stock has traded between $20.29 and $44.69. A stop-loss of $35.75 looks good here.
Larry Schutts is a contributing editor for Theflyonthewall.com and the Vice-President of Stockwinners.com.
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