Triumph Group, Inc. (TGI) and Boeing Commercial Airplanes (BA) have reached an agreement to extend their strategic collaboration on critical system components. Consequently, Triumph will continue as a key supplier of hydraulic components across multiple Boeing programs.
Triumph designs, manufactures, and repairs aerospace and defense systems, components, and structures. One of the three multi-year contract extensions requires Triumph to supply Boeing with landing gear components for the Boeing 787. The manufacturer of aerospace structures will also supply hydraulic locking actuators and transducers for all 787 planes.
Another contract has Triumph’s plant in Clemmons, North Carolina, commencing work on the production of components. For the third contract, its site in Valencia, California, will supply hydraulic accumulators, manifolds, and other parts. The Valencia contract should strengthen Triumph’s business base as commercial aviation continues to pick up. (See Triumph stock analysis on TipRanks)
President of Triumph Actuation Products & Services Scott Ledbetter said, “We are proud to continue our longstanding relationship with Boeing and support their various commercial programs as rates rebound following the pandemic.”
The various components that Triumph is supplying will go a long way toward supporting Boeing’s commercial programs at a time when air travel is picking up. Triumph executive vice president William Kircher expects the agreements to boost Boeing’s revenue and profitability metrics.
In April, Jefferies analyst Sheila Kahyaoglu reiterated a Hold rating on Triumph. The analyst also increased the price target to $16 from $14, implying that shares are fairly priced at current levels.
Consensus among analysts on Wall Street is a Moderate Buy based on 3 Buy, 1 Hold, and 1 Sell ratings. The average analyst price target of $20.40 implies 28% upside potential to current levels.
Triumph Group scores a 6 out of 10 on TipRanks’ Smart Score rating system implying its performance is likely to align with market averages.
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