After the Wall Street Journal reported last week that larger ocean shipping lines are turning to airplanes to help navigate supply-chain disruptions, Desjardins Securities analyst Benoit Poirier reiterated his bullish view on Hroux-Devtek Inc. , seeing it “well-positioned to capitalize” as a supplier for Boeing Co.’s 777 and 777X programs.
“Air freight industry revenue grew 21 per cent year-over-year last year to US$289-billion vs US$264-billion in 2019,” he said. “Over the past three years, 400 freight planes have joined the global fleet (up 20 per cent), according to Boeing; it estimates the global freighter fleet will increase to more than 3,600 in 2040 from 2,000 now. HRX’s current widebody exposure includes landing gear for the 777X (including freighter), actuation components for several of Boeing’s widebody platforms and the A330/A350 programs.”
He maintained his “Top Pick” recommendation and $25 target for shares of the Longueuil, Que.-based company. The average on the Street is $21.98.
“The valuation gap versus U.S. aerospace supplier peers has widened to 5.5 times from the 15-year average premium of 2.8 times,” he said.