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Bank of America downgraded HEICO Corporation
HEI from Buy to Neutral and lowered the price objective from $51.00 to $47.00.
Bank of America noted, "In our opinion, margins are being pressured by a lower sales mix from both Flight Support Group (FSG) and Electronic Technologies Group (ETG). The lower sales mix can be attributed to the decline for certain aftermarket replacement parts and overhaul services due to domestic economic uncertainty.
In the outyears, we are lowering our operating margin assumptions as we now expect HEI to exit 2017 at 20.4% vs. our previous forecast of 20.8%. We are also factoring in 2% interest income from cash accumulated in the balance sheet. We note that we are not including possible future acquisitions in our assumptions."
HEICO Corporation closed at $44.71 on Wednesday.
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