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UPDATE: Bank of America Raises PO on Wesco Aircraft on YoY Sales Increase


In a report published on Monday, Bank of America analyst Ronald Epstein raised the price objective on Wesco Aircraft (NYSE: WAIR) from $16 to $17.50 and maintained a Neutral rating.

In the report, Bank of America commentated that, "We recently upgraded Wesco Aircraft to Neutral (Upgrading to Neutral, raising PO to $16 from $13, 30 April 2013) because ah hoc sales have continued to perform better than we expected (2QFY13 ad hoc sales were up 27% Y/Y and up 10% Q/Q). As the commercial aerospace OE cycle continues to ramp up, we expect Wesco to benefit. According to management, lead times are starting to increase, as the ramp-up for the 737NG and A320 consume capacity. In 2009, lead times were 8-12 weeks, on average. This increased to about 20 weeks in 2012 and to about 44 weeks currently. The 50-week lead time has historically been a psychological barrier for the supply chain, and customer order batches tend to increase at this level. This buying pattern, in turn, further lengthens lead time. Historically, the company gains an additional 10 points in ad hoc margins every time the lead time doubles."

Wesco Aircraft. traded at $16.88 at the time of publication.


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Posted-In: Bank of America Ronald EpsteinPrice Target Analyst Ratings

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