StandardAero: Carlyle Exit Pressure Masks Strong Fundamentals

Dhierin BechaiInvesting Group LeaderFollow5ShareSavePlay(8min)Comment(1)SummaryStandardAero is upgraded to strong buy, reflecting reduced overhang from Carlyle/GIC ownership and compelling valuation versus peers.Recent share price volatility stems from expected shareholder exits, not operational weakness; Carlyle's stake has dropped from 63% to 32%.SARO trades at a discount to peers, with EBITDA and free cash flow estimates stable and a modestly raised price target of $42.28.Share repurchase programs and improving margins support upside; net debt leverage is expected to remain within an acceptable range by 2026.Looking for more investing ideas like this one? Get them exclusively at The Aerospace Forum. Learn More » Photofex-AT/iStock Editorial via Getty Images StandardAero (NYSE:SARO) has gained 21.7% since my last report on a largely flat performance of the S&P 500. It highlights the growth prospects for companies such as StandardAero in the aerospace and defenseThis article was written byDhierin Bechai22.94K FollowersFollowDhierin-Perkash Bechai is an aerospace, defense and airline analyst. Dhierin runs the investing group The Aerospace Forum, whose goal is to discover investment opportunities in the aerospace, defense and airline industry. With a background in aerospace engineering, he provides analysis of a complex industry with significant growth prospects, and offers context to developments as they occur, describing how they might affect investment theses. His investing ideas are driven by data informed analysis. The investing group also provides direct access to data analytics monitors. Learn more.Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.