Fadi Benjamin from Toronto based, Pope & Company has become the fifth analyst to initiate coverage of FLYHT Aerospace, with a BUY rating and a target price of $1.05.
The key points in the report titled “FLYHT VECTORING FOR GROWTH” are as follows:
- Immense market size: A sizable and growing market of 20,310 airplanes in service, and 35,280 airplanes to be delivered in the next 20 years.
- Differentiated/Purpose-Built: FLYHT’s technology is unrivalled by flight data gathering systems, in‐flight entertainment, or passenger connectivity focused solutions.
- Value Creating To End Customer: Our analysis supports US$150,000 of direct cost savings per year per airplane from fuel management, maintenance rationalization , and accurate time focus only on program wins and moderate contribution from the sales force. Applying this to Southwest Airlines’ fleet, net savings could contribute over US$60MM to the bottom line in 2013.
- Growth Catalysts: Our conservative assessment is based on realizing revenues from three programs: SkyBlue (218 aircraft), Datang (415 aircraft), and an L‐ partnership with Airbus. Significant upside potential exists from new program wins, a partnership with a Boeing approved factory supplier, and supportive direct sales into other airlines.
- Valuation: Our valuation is based on a 5‐year DCF analysis using a discount rate of 10% and a terminal value growth rate of 3.9%, in‐line with industry peer projections. Our target price corresponds to an EV/EBITDA multiple of 14.8x on projected FY2016.
- Investment Recommendation: We rate FLY a BUY for its exceptional growth profile, differentiated product, and market size. In our opinion, FLYHT is ahead of its competition, and presents a unique and sought after solution.
For a copy of the Pope & Company research report on FLYHT please contact Fadi Benjamin at 416-588-9397 or by email at firstname.lastname@example.org.
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