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Triumph Group Gains on Global Jet Demand & Strategic Buyouts

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We recently issued an updated research report on Triumph Group, Inc. (TGI - Free Report) . The company delivered first-quarter fiscal 2019 adjusted earnings of 34 cents per share, missing the Zacks Consensus Estimate of 36 cents by 5.6%. However, the bottom line improved 41.7% from the year-ago period’s figure of 24 cents per share.

Triumph Group’s aircraft system components remain an important growth platform, buoyed by increasing global demand for jets. Also, continuous focus on growth through addition of products and services, expansion of operating capacity along with marketing a range of products will drive the company’s performance.

What’s Driving the Stock?

Commercial narrow-body jet remains an important growth platform for Triumph Group, buoyed by increasing global demand for such jets as well as the company’s strong position pertaining to system components for both A320 and Boeing 737. The company plans to expand its system components operation to Boeing and Airbus jet makers. Also, it is on track to meet its target of generating 30% revenues from military end markets over the next three years. Incorporation of Triumph Group’s products in these jets will boost significant growth for the company.

In terms of inorganic growth, the company agreed to collaborate with Quickstep, Australia's leading independent manufacturer of advanced carbon fiber composite components, in the fiscal first quarter. Through this merger, Triumph Group aims at expanding its position within the growth markets and also delivering a high performance plus differentiated products to commercial and military original equipment manufacturer (OEMs).

However, a large portion of Triumph Group’s aftermarket sales comes from third-party repair and overhaul, thus exposing it to tough competition from OEMs as well as third-party organizations. Moreover, volatile energy and commodity prices can put pressure on the company’s margins.

Estimates for Triumph Group have been revised upward over the past 30 days. Notably, the Zacks Consensus Estimate for the company’s 2018 and 2019 bottom line has moved 3.9% and 4.3% north to $1.86 and $2.18 per share, respectively. However, the company’s earnings lagged the consensus mark in three of the trailing four quarters with an average miss of 34.27%.

Triumph Group, Inc. Price

Zacks Rank & Key Picks

Triumph Group currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here. Some better-ranked stocks from the Zacks Aerospace Sector are as follows:

Teledyne Technologies Incorporated (TDY - Free Report) is a Zacks #1 Ranked player. The stock has seen the Zacks Consensus Estimate for current-year earnings being revised 9.3% upward over the past 30 days to $8.25 per share.

Ducommun Incorporated (DCO - Free Report) carries a Zacks Rank #2 (Buy). The stock has seen the consensus estimate for 2018 earnings per share move 24.3% north over the past 30 days to 92 cents.

Huntington Ingalls Industries, Inc. (HII - Free Report) has a Zacks Rank of 2. The stock has seen the consensus mark for 2018 bottom line per share being raised 1.4% over the past 30 days to $17.24.

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