Shares of B/E Aerospace Inc. (BEAV - Snapshot Report) scaled a new 52-week high of $53.24 in Thursday’s trading session before closing at $53.11. The stock has delivered a one-year return of about 12.3%.
Over the past 52 weeks, B/E Aerospace’s shares have ranged from a low of $36.38 on Jan 20, 2016 to a high of $53.24 on Oct 6, 2016. The average volume of shares traded over the last three months is 902,476.
What’s Driving the Stock?
The company’s total backlog in the second quarter was nearly $8.9 billion.
Recently, B/E Aerospace secured a contract from a leading international airline to supply first-class suites for the carrier’s Boeing 777 fleet. The contract is worth nearly $450 million and it included an option portion of nearly $190 million.
Traffic growth and high profitability have been pushing aircraft deliveries by the two aircraft majors – Airbus Group SE (EADSY - Snapshot Report) and The Boeing Company (BA - Analyst Report) . They are also two of B/E Aerospace’s most important customers.
Over the long run, global air traffic has been projected grow 4.5% to 5% on an annual basis, which would fuel demand for B/E Aerospace’s products. In fact, in such a scenario, B/E Aerospace’s Commercial Aircraft, which constitutes over 80% of the company’s business, is expected to surpass expectations. The company expects 2016 earnings around $3.25 per share, while revenues improve 5% from the 2015 levels.
Further, B/E Aerospace has established a strong foothold in China, Middle East and North America. Last year, the company had bagged 75% of the total Chinese orders and 80% of the total North American orders, riding high on its reputation for innovation, quality products, timely delivery and global customer support.
Zacks Rank & Key Picks
B/E Aerospace carries a Zacks Rank #3 (Hold). A better-ranked stock in the same space is AAR Corporation (AIR - Analyst Report) .
AAR Corp. has witnessed one upward estimate revision for fiscal 2017 over the last 60 days. The stock carries a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
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