Wolfe Research Starts VSE Corporation (VSEC) at Outperform

Wolfe Research analyst Louis Raffetto initiates coverage on VSE Corporation (NASDAQ: VSEC) with a Outperform rating and a price target of $190.00.

The analyst comments
We are initiating coverage of VSE Corporation (VSEC) with an Outperform rating and YE26 price target of $190 (15% upside), in the context of a Market Overweight view on Aerospace. VSE shares are up 70%+ YTD which puts them on par with the likes of GE and HWM and meaningfully above the group average of ~40% and the S&P 500 (+13%). The company is set for significant sales and earnings growth in 2025 due to solid organic growth but also in large part from their ~$200M Kellstrom deal which closed in December 2024. All in, 2025 sales are set to grow nearly 40% with EBITDA and EPS up mid-teens. While we see solid growth continuing into 2026 and 2027, assuming no additional material M&A we see sales growth more in the HSD range with EBITDA up LDD and EPS up high-teens. Our price target is based on ~20x our 2027 EBITDA estimate of $212M (-6% to consensus) and our YE26 net debt est of $330M. Shares are currently trading at ~19.5x our 2026 EBITDA estimate and ~17.5x our 2027 EBITDA estimates. The 20x assumes the peer average multiple on '26 holds for '27 given we continue to expect a still strong backdrop for VSE and the broader aerospace group. Downside risks: lower than expected sales growth, flat or down margins, need to raise capital (debt or equity) other than for material M&A."

For an analyst ratings summary and ratings history on VSE Corporation click here. For more ratings news on VSE Corporation click here.

Shares of VSE Corporation closed at $164.48 yesterday.

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