On May 14, Zacks Investment Research upgraded
Erickson Air-Crane Inc.
) 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.
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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
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
Other Stocks to Consider
Besides Erickson Air-Crane other defense operators worth
Wesco Aircraft Holdings, Inc.
Northrop Grumman Corporation
Alliant Techsystems Inc.
). All these companies presently carry a Zacks Rank #2 (Buy).