HEICO: Leveraging Flight Support Reacceleration, Defense Momentum, and M&A Capacity to Drive Sustained Above-Market Growth

William Blair analyst Louie DiPalma has reiterated their bullish stance on HEI stock, giving a Buy rating today.Louie DiPalma has given his Buy rating due to a combination of factors that point to sustained, above-market growth for HEICO. He highlights the reacceleration of organic growth in the Flight Support Group, driven by robust demand across all subsegments, including aftermarket parts, specialty products, and repair and overhaul services, as airlines and defense customers seek cost-effective yet dependable alternatives. He also notes that the company is seeing strong momentum in its missile defense-related business, supported by increasing U.S. and allied defense spending, which underpins a durable revenue stream. In addition, the Electronic Technologies Group is delivering steady, if uneven, growth, with a healthy backlog that supports management’s outlook for continued expansion next year. DiPalma also emphasizes HEICO’s solid balance sheet, with leverage running below management’s target level, which he views as providing significant capacity for further acquisitions to augment organic growth. He believes that resilient global demand for commercial and business air travel, combined with HEICO’s niche position in PMA parts and its relatively small share of the overall aftermarket, affords a long runway for market share gains. He further argues that the company is well positioned to benefit from government efforts to reduce procurement costs and rising defense budgets in the U.S. and among NATO allies. Taken together, these factors support his expectation for continued earnings growth and roughly mid-teens annual upside in the stock, justifying his Buy recommendation.According to TipRanks, DiPalma is an analyst with an average return of -1.0% and a 51.89% success rate. DiPalma covers the Technology sector, focusing on stocks such as AST SpaceMobile, Rekor Systems, and Parsons.In another report released today, Truist Financial also reiterated a Buy rating on the stock with a $391.00 price target.