On Tuesday, Triumph Group (NYSE:TGI) experienced a change in stock rating as TD Cowen revised its stance on the company, downgrading it from Buy to Hold. The firm also adjusted the price target for Triumph Group's shares, reducing it to $14.00 from the previous target of $19.50.
The downgrade was attributed to several factors impacting the company's financial outlook. TD Cowen pointed to moderated cash flow expectations due to scaled-back ramp plans for the 737 and 787 aircraft models. Additionally, anticipated weaker military results and concerns over divestiture issues were cited as reasons for the revised rating.
Triumph Group's new price target of $14.00 is based on a valuation multiple of 10.5 times the company's trailing twelve-month enterprise value to earnings before interest, taxes, depreciation, amortization, and pension (TEV/EBITDAP). This adjustment reflects the firm's view that the stock is now fairly priced, considering the revised earnings expectations and current market conditions.
The analyst from TD Cowen offered a direct comment on the rationale behind the downgrade: "We're downgrading TGI to Hold for moderated cash flow due to pared 737/787 ramp plans and expected lower military results, as well as divestiture overhangs."
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