Update (9:45 a.m.): Updated with Tuesday market open information.
NEW YORK (TheStreet) -- RBC Capital downgraded Triumph Group (TGI) to "sector perform" from "outperform" and set a $71 target price. The firm noted the company could face increased charges and business disruptions.
The stock was falling 1.53% to $63.73 at 9:41 a.m. on Tuesday.
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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 multiple 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 revenue growth, reasonable valuation levels 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:
- Despite its growing revenue, the company underperformed as compared with the industry average of 7.4%. Since the same quarter one year prior, revenues slightly increased by 2.8%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
- The debt-to-equity ratio is somewhat low, currently at 0.71, 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 0.88 is somewhat weak and could be cause for future problems.
- TRIUMPH GROUP INC has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. This company has reported somewhat volatile earnings recently. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, TRIUMPH GROUP INC increased its bottom line by earning $5.66 versus $5.42 in the prior year. For the next year, the market is expecting a contraction of 16.6% in earnings ($4.72 versus $5.66).
- The share price of TRIUMPH GROUP INC has not done very well: it is down 10.48% and has underperformed the S&P 500, in part reflecting the company's sharply declining earnings per share when compared to the year-earlier quarter. Looking ahead, although the push and pull of the overall market trend could certainly make a critical difference, we do not see any strong reason stemming from the company's fundamentals that would cause a continuation of last year's decline. In fact, the stock is now selling for less than others in its industry in relation to its current earnings.
- You can view the full analysis from the report here: TGI Ratings Report