Goldman Sachs Raises PT on BE Aerospace to $50
Goldman Sachs has published a research report on BE Aerospace (NASDAQ: BEAV) reiterating its Conviction-List Buy rating after the company's announcement that it has been awarded an $800M contract by Boeing (NYSE: BA).
In the report, Goldman Sachs writes, "The $800 mn win increases BEAV's already very large Seller Furnished Equipment (SFE; sole source, specified in to the life of an aircraft program) backlog by 25%. We continue to believe the market misunderstands or ignores BEAV's SFE story, as the company has over $4 bn of SFE backlog, in addition to $3.5 bn of BFE backlog, and its market cap is only $4 bn. Investors pay 12X CY13E EPS, a below mid-cycle multiple on EPS that still has a fairly small SFE contribution given most of the content is on next generation aircraft. This particular contract will begin deliveries in 3Q2012. There are also retrofit opportunities not included in the $800 mn."
Goldman Sachs has raised the price target from $47 to $50 on BE Aerospace, which is currently trading up $1.25 from Friday's $40.83 closing price.
