We are upgrading our recommendation on Triumph Group, Inc. (TGI) from Neutral to Outperform based on the huge organic growth the company has experienced on the back of high demand in the industry. Also, efforts of lowering costs, increasing margins and a strong balance sheet bode well for the stock.
The company's concerted efforts in achieving these positives would in turn increase shareholders value which is considered to be an added perk. TGI reported strong results in the second quarter 2013 with earnings of $1.57 per share, an increase of 36.5% year over year. Also, there was a huge jump in revenue of 18.7%, leading it to stand at $938 million.
Our long-term Outperform recommendation indicates that the company will beat the broader U.S. equity market over the next six to twelve months. Our $79.00 target price, 13.2x 2013 EPS, reflects this view.
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