Bullish on Erickson Air-Crane - Analyst Blog
May 16 2013 - 5:50AM
Zacks
On May 14, Zacks Investment
Research upgraded Erickson Air-Crane Inc. (EAC) to
a Zacks Rank #1 (Strong Buy).
Why the Upgrade?
Erickson Air-Crane has been witnessing rising earnings estimates,
thanks to its strong first quarter 2013 results. Moreover, this
high lift aircraft manufacturer registered positive earnings
surprises in 3 of the last 4 quarters. The long-term expected
earnings growth rate for this stock is 5.5%.
Erickson Air-Crane posted first
quarter 2013 adjusted earnings of 1 cent per share, ahead of the
Zacks Consensus Estimate of a loss of 13 cents. The quarterly
revenue of $36.9 million climbed 33.8% year over year. The figure
also surpassed the Zacks Consensus Estimate of $33.0 million.
On May 2, the company completed the acquisition of Evergreen
Helicopters, Inc. from Evergreen International Aviation, Inc. This
acquisition will help Erickson Air-Crane to expand its markets and
be immediately accretive to its earnings. In addition, the
company’s proposed Air Amazonia acquisition will expand its reach
in the developing South American oil and gas markets.
The present valuation also makes the shares of Erickson Air-Crane
attractive. Shares of the company currently trade at 12.03x
12-month forward earnings, a 13.4% discount to the peer group
average of 13.89x. Erickson Air-Crane’s ROE of 17.1 is higher than
its peer group average of 10.5, indicating better return from
investments than its peers.
The Zacks Consensus Estimate for 2013 leaped 46.58% to $2.29 per
share as all the estimates were revised higher over the last 30
days. All estimates moved north for 2014 as well over the past one
month, lifting the Zacks Consensus Estimate by 7.14% to $2.45 per
share.
Other Stocks to Consider
Besides Erickson Air-Crane other defense operators worth
accumulating are Wesco Aircraft Holdings, Inc.
(WAIR), Northrop Grumman Corporation (NOC) and
Alliant Techsystems Inc. (ATK). All these
companies presently carry a Zacks Rank #2 (Buy).
ALLIANT TECHSYS (ATK): Free Stock Analysis Report
ERICKSON AIR-CR (EAC): Free Stock Analysis Report
NORTHROP GRUMMN (NOC): Free Stock Analysis Report
WESCO AIRCRAFT (WAIR): Free Stock Analysis Report
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