William Blair starts Boeing, Heico, TransDigm with bullish stock views

William Blair last night initiated coverage of Boeing (BA), Heico (HEI) and TransDigm (TDG) with Outperform ratings. Depressed aircraft production for the past three years, combined with “revenge travel,” will result in an aftermarket “supercycle” for the next decade, the analyst tells investors in a research note. The firm says airlines will continue to extend the lives of aging aircraft with spare parts to accommodate the robust travel demand coming out of the pandemic, driving a $110B aftermarket parts and services industry with steady growth. Accordingly, Blair initiated coverage of aftermarket leaders TransDigm and Heico with Outperform ratings and reiterated an Outperform rating on “aftermarket rising star” VSE Corp. (VSEC). The firm says Boeing will also benefit from elevated aftermarket demand since one-quarter of its revenue comes from services. However, the real upside will come from higher production rates, contends the analyst.