Morgan Stanley Initiates Coverage On Several Industrial Stocks - Curtiss-Wright (NYSE:CW), Heico (NYSE:HEI), Hexcel (NYSE:HXL)

Morgan Stanley analyst Kristine Liwag initiated coverage on six Industrial stocks within Machinery and Aerospace & Defense industries.
The analyst initiated Crane Co. CR with an Equal Weight rating and a price target of $111, implying an upside of 14%.
Liwag says Crane has market-leading niche businesses with high barriers to entry, particularly in Aerospace & Electronics and Payment & Merchandising Technologies.
However, she sees downside risk to high consensus expectations on Crane's earnings growth.
The analyst initiated Curtiss-Wright Corp. CW with an Overweight rating and a price target of $180, implying an upside of 38.7%.
Liwag views Curtiss-Wright as undervalued on a sum-of-the-parts basis as she contends investors underappreciate Curtiss-Wright's portfolio after its recent restructuring.
The analyst adds that the reorganization has elevated the company's most attractive businesses, which she thinks should allow Curtiss-Wright to command a higher multiple.
The analyst initiated Howmet Aerospace Inc HWM with an Overweight rating and a price target of $40, implying an upside of 38.5%.
Liwag says Howmet is a leading provider of advanced engineered solutions for the aerospace and transportation industries. Its core competencies in the hot section of the jet engine have a steep barrier to entry.
She expects the recovery from COVID-19 to drive meaningful upside in earnings from higher commercial aircraft production rates and from the aftermarket.
Liwag initiated RBC Bearings Inc ROLL with an Overweight rating and a price target of $263, implying an upside of 31%.
Liwag mentions that the manufacturer and marketer of highly engineered precision bearings and products for the aerospace and industrials industries is her top Overweight in the space as she argues that its acquisition of Dodge is "a game-changer" that provides underappreciated upside to the stock.
She believes Dodge will provide RBC Bearings with incremental free cash flow, sticky, recurring industrial business, and improved manufacturing technology from its expertise in factory automation.
Liwag initiated Hexcel Corp HXL with an Underweight rating and a price target of $55, implying an upside of 8%.
Liwag says the company is one of only a few with the capability to produce intermediate modular carbon fiber, but its capability is largely levered toward widebody original equipment, which is a segment she expects to lag the rest of aerospace since she does not expect widebody aircraft production rates to recover to pre-COVID-19 levels until after 2025.
The analyst initiated Heico Corp HEI with an Overweight rating and a price target of $180, implying an upside of 29.4%.
Liwag expects the Parts Manufacturer Approval, or PMA, market to outpace the overall aftermarket recovery and notes that Heico is the largest independent supplier of the non-OEM jet engine and aircraft component replacement parts.
She thinks the Street underappreciates Heico's dry powder available for potential new deals.
Price Action: CR shares are trading lower by 1.34% at $97.61, CW higher by 2.01% at $129.79, HWM higher by 0.24% at $28.89, ROLL higher by 0.77% at $200.45, HXL lower by 1.28% at $50.80 and HEI higher by 0.22% at $139.15 on the last check Friday.

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