UPDATE: Bank of America Upgrades Wesco Aircraft Holdings to Neutral Following 2Q FY13 Results
In a report published Tuesday, Bank of America analyst Ronald J. Epstein upgraded the rating on Wesco Aircraft Holdings (NYSE: WAIR) from Underperform to Neutral, and raised the price target from $13.00 to $16.00.
In the report, Epstein noted, “We note that our previous Underperform rating on the stock anticipated continued pressure in the company's ad hoc sales which comprise ~40% of total sales. However, considering that ad hoc sales have continued to perform better than we expected (2Q FY13 ad hoc sales were up 27% Y/Y and up 10% Q/Q), we have become more constructive regarding the near-term outlook for Wesco. We are raising our PO to $16 from $13 as we factor in a 13x one-year forward P/E multiple on CY14 earnings. This is a weighted average multiple that factors in a 10x multiple on Wesco's defense business and a 16x multiple on its commercial business. In our view, this reflects the more challenging defense environment as well as the commercial aerospace upcycle.”
Wesco Aircraft Holdings closed on Monday at $14.77.
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