Wells Fargo Starts Triumph Group (TGI) at Outperform

February 15, 2013 8:04 AM EST
Get Alerts TGI Hot Sheet
Price: $25.35 -0.39%

Rating Summary:
    10 Buy, 7 Hold, 3 Sell

Rating Trend: Down Down

Today's Overall Ratings:
    Up: 13 | Down: 22 | New: 54
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Wells Fargo initiates coverage on Triumph Group (NYSE: TGI) with a Outperform with an $85-$90 valuation range.

The firm comments, "We see upside for the stock even though it has substantially outperformed (up 114% vs. S&P500’s 37%) since its acquisition of Vought in June-2010. We expect the company to provide additional long term guidance at its February 20 analyst meeting and the stock could react favorably to that outlook. We think TGI could prove to be one of the more-attractive commercial aerospace stocks over the cycle as it earns an estimated $8 of EPS by FY2016 driven by legacy program volume increases, content on new platforms, accretion from GPECS, and interest expense reduction from de-leveraging. As the company continues to outperform other suppliers, the valuation discount to other suppliers should narrow. We believe that the commercial supplier group typically reaches about 13-14x P/E on peak earnings, which could mean TGI ultimately reaches $110 per share during this upturn. In the near-term, we expect the stock to reach about $85-$90 per share as it maintains its historical 12.7x forward P/E multiple."

For an analyst ratings summary and ratings history on Triumph Group click here. For more ratings news on Triumph Group click here.

Shares of Triumph Group closed at $72.81 yesterday.

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