The firm said it lowered its rating on the company, which designs, engineers, manufactures, repairs, and distributes aerostructures, aircraft components, and other accessories, based on its "overly optimistic" long term strategic outlook through 2020.
Bank of America/Merrill Lynch reiterated its $73 price target on the stock.
Separately, TheStreet Ratings team rates TRIUMPH GROUP INC as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:
"We rate TRIUMPH GROUP INC (TGI) a BUY. This is driven by a number of strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its attractive valuation levels, good cash flow from operations and largely solid financial position with reasonable debt levels by most measures. We feel these strengths outweigh the fact that the company has had sub par growth in net income."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The debt-to-equity ratio is somewhat low, currently at 0.68, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels. Although the company had a strong debt-to-equity ratio, its quick ratio of 0.85 is somewhat weak and could be cause for future problems.
- Net operating cash flow has increased to $101.79 million or 12.73% when compared to the same quarter last year. Despite an increase in cash flow, TRIUMPH GROUP INC's cash flow growth rate is still lower than the industry average growth rate of 44.08%.
- TRIUMPH GROUP INC's earnings per share declined by 35.5% in the most recent quarter compared to the same quarter a year ago. The company has suffered a declining pattern of earnings per share over the past two years. However, we anticipate this trend to reverse over the coming year. During the past fiscal year, TRIUMPH GROUP INC reported lower earnings of $3.91 versus $5.66 in the prior year. This year, the market expects an improvement in earnings ($5.80 versus $3.91).
- TGI, with its decline in revenue, slightly underperformed the industry average of 3.2%. Since the same quarter one year prior, revenues slightly dropped by 5.0%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
- You can view the full analysis from the report here: TGI Ratings Report