In a note released Thursday, Credit Suisse upgraded Triumph Group (NYSE: TGI) to Outperform from Neutral and raised the price target to $88 from $71, following Wednesday's analyst day.
Management boosted full year fiscal 2015 guidance and offered long-term target growth ranges for top and bottom line.
Credit Suisse analyst Julie Yates noted, "We think the micro story at TGI has been largely de-risked (Red Oak complete, 747 on the mend) and the macro risk (production rates on 747, 777, A330) is longer-term and priced in at current levels. If mgmt. can achieve its L-T EPS growth targets of 15% (embeds acquisitions & buybacks), we think the stock offers a unique GARP opportunity in aerospace."
Yates explains that the change from the firm's previous downgrade in September came from EPS growth and FCF generation resume for the full fiscal year of 2015 after a challenging 2014. Yates thinks management is making a wise capital allocation decision with the firm's share buyback and strategic acquisitions and expects the capital allocation plan to continue. Yates also relayed excitement in Triumph's new energetic CFO.
Triumph shares closed Wednesday at $70.15.
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