Triumph Group Taking Wing

We continue to keep faith in Triumph Group, Inc. (TGI - Analyst Report) and maintain our Buy recommendation. As part of the aerospace/defense sector, TGI stands to gain as the industry is about to enter the "sweet spot" of this cycle.

This is borne-out by the fact that the deliveries of new models are just round the corner and the sales of more mature models are apace. Further, maintenance, repair and overhaul (MRO) of both commercial and military equipment are on the rise.

Although under pressure, the U.S. defense budget remains strong and focused on transformation. Hence, military sales are expected to increase roughly in line with global military budgets. Boeing (BA - Analyst Report) and Airbus are set to deliver approximately 6% more commercial aircraft in calendar 2008 compared to calendar 2007. TGI expects its direct and indirect sales to Boeing and Airbus will benefit from such increases.

Based on the robust fundamentals of the aerospace/defense sector and that of the company, TGI's management offered a projection of sales in range of $1.25 billion to $1.35 billion for 2009. Thus, we believe that TGI remains under-valued at current levels and forecast a calendar-year 2008 projection for TGI of $4.84/share engenders a price of $83.73.

Read the full analyst report on TGI