Morningstar Rating

Stock Research and Analysis

by Neal Dihora, CFA

Bulls Say

We estimate that around 16% of Moog's sales have a somewhat recurring nature, including aftermarket sales for aircraft, industrial machinery markets, and medical pump administration sets.
Many aircraft platforms, including the Boeing 787, are moving from development to production, which should drive strong top- and bottom-line results.
Moog has decided to begin a 4-million-share repurchase program, and we think this is a good capital allocation decision as acquisition prices have increased. Read more 

Bears Say

Moog is exposed to several high-risk military aircraft programs, including the V-22 Osprey and the F-35 Joint Strike Fighter. Cuts to these programs would cause a material dent in the company's top line.
Moog has expended significant R&D resources as a supplier on the Boeing 787 Dreamliner. The company could experience a similar issue with the Airbus A350 platform.
Class A shares have one tenth the voting rights of Class B shares. There are 41 million Class A shares and 4.5 million Class B shares outstanding. Read more 

Management

The firm is led by John Scannell, who took over from longtime CEO Robert Brady in December 2011. He has been with Moog for 22 years, but his ability to maneuver the firm through economic cycles is untested.
Historically, management has been very candid,  Read more 

Profile

Moog is a worldwide designer, manufacturer, and integrator of precision control components and systems used in military and commercial aircraft (39% of fiscal 2012 revenue),  Read more 

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