Aerospace stocks have been in the news a lot recently with the United Technologies UTX and Raytheon RTN merger making major headlines. With that being said, here are some companies that have performed well in 2019 and, based on analyst expectations, could perform even better in 2020.
Lockheed Martin Corp LMT
Lockheed Martin is a global security and aerospace company based in Bethesda, Maryland. Lockheed Martin is a major producer of military aircraft and, partnered with Boeing BA, forms the United Launch Alliance which provides spacecraft launch services for the US government. Lockheed Martin has great growth estimates and its earnings estimate revisions for fiscal 2019 and 2020 have trended completely upward in the past 60 days. Zacks Consensus Estimates call for fiscal 2019 earnings to jump 16% on the back of 7% revenue growth. This top and bottom line growth is expected to continue into fiscal 2020 where revenue and earnings are expected to gain 4.5% and 21%, respectively, on top of their 2019 numbers. These growth expectations would bring fiscal 2020’s EPS to $24.82, compared to just $17.59 in 2018. Lockheed Martin’s expected growth may prove to be a launching pad for the stock to build on its 35% YTD growth.
Astronics Corp ATRO
New York-based Astronics is a producer of aircraft and aerospace technology. Some of its products include aircraft data systems, electrical power systems, and lighting systems. Zacks Consensus Estimates call for Astonics’ earnings to soar 36% in fiscal year 2019. This expected earnings growth comes with an expected revenue decrease of about 2%. Looking further ahead into fiscal 2020, revenue and earnings are both expected to increase with revenue growth expectations around 4% and earnings growth expectations currently around 10%. Astronics' P/E of 20.29 is below the industry average of 24.20. Relatively good value and solid growth expectations may be able to help the stock add to its 28% YTD growth.
Heico Corp HEI
Heico is a Florida-headquartered aerospace and electronics company that focuses on niche markets within the aircraft, spacecraft, defense equipment, medical equipment, and telecommunications sectors. Heico has significantly outperformed its peers and the S&P 500 for the past 3 years and the company’s earnings outlook remains positive. Heico has had 4 upward revisions for its fiscal 2019 and fiscal 2020 (Heico’s fiscal year ends in October) earnings estimates over the past 60 days compared to 0 downward revisions. Zacks Consensus Estimates call for earnings to surge 22.6% in fiscal 2019 on the back of 12% revenue growth. Fiscal 2020 is expected to bring further growth to both the top and bottom line with expected revenue growth of 7% above its fiscal 2019 estimate and earnings growth of 9% above its fiscal 2019 expectation. Heico’s expected earnings growth would bring its EPS to an estimated $2.42 in fiscal 2020, $0.61 higher than 2018’s EPS, representing 33% growth over the two years. Similar to Astronics and Lockheed Martin, Heico stock has already had phenomenal YTD growth, 64% to be exact, and the positive outlook presented by earnings expectations could further boost the stock’s price.
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