In a report released on April 11, Sheila Kahyaoglu from Jefferies maintained a Buy rating on VSE (VSEC – Research Report), with a price target of $135.00.
Sheila Kahyaoglu’s rating is based on VSE’s strategic shift towards becoming a pure-play aviation aftermarket company following the divestiture of its Fleet Solutions business. This move has allowed VSE to focus on its core strengths in the commercial aerospace sector, with anticipated improvements in EBITDA margins and a reduction in interest expenses due to debt paydown.
The company is also expected to experience significant organic growth, particularly in its aviation segment, with projections of 35-40% growth in 2025. This includes contributions from recent acquisitions and an estimated 11% organic growth in aviation revenue. Additionally, VSE’s ability to improve its profitability and manage working capital more effectively post-divestiture supports the positive outlook. The $135 price target reflects a premium to peers, justified by VSE’s above-market growth potential and strategic positioning in the aviation aftermarket space.
According to TipRanks, Kahyaoglu is a 5-star analyst with an average return of 9.1% and a 57.58% success rate. Kahyaoglu covers the Industrials sector, focusing on stocks such as Boeing, GE Aerospace, and American Airlines.