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Triumph Receives Extended GSE Operation Contract From Boeing logo 10/15/2020

Triumph Group's TGI business unit, Triumph Systems & Support, has recently received a two-year contract extension from Boeing BA for their ground support equipment (GSE) operation in San Antonio, TX.

Per the contract terms, the company's Triumph Systems & Support unit will maintain military and commercial aircraft at the San Antonio site to ensure reliability and availability of critical equipment needed for service aircraft on ground through June 2022. The contract extension indicates the excellent services Triumph Group has been providing to Boeing and the continuation of the contract will ensure that the latter’s aircraft remain ready for operations.

A Brief on Triumph's San Antonio Facility

Earlier in February 2020, Triumph Group combined its Integrated Systems and Product Support business units into the Triumph Systems & Support business unit. This San Antonio-based facility provides support in the maintenance and modification of large, wide-body aircraft and oversees more than 5,600 equipment inspections each year.

Triumph Group's San Antonio facility has maintained Boeing's GSE operations since 2004 and the latest contract is an extension of a 2017 agreement between the companies.

What Lies Ahead

Although Boeing has recently lowered its rolling 20-year forecast for airplane demand due to the impacts of the COVID-19 pandemic, it still forecasts a total market value of $8.5 trillion over the next decade, including demand for aerospace products and services. Boeing has also projected a $2.6-trillion market opportunity in defense and space for the next 10-year period.

Such projections look promising for Triumph Group, as it continues to be a major product supplier to aircraft manufacturing giants like Boeing and Airbus SE. The association with these companies will help Triumph receive pivotal contracts related to commercial airplane maintenance.

Price Performance

Shares of Triumph Group have gained 15.1% in the past six months compared with the industry’s growth of 12.4%.

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Zacks Rank & Stocks to Consider

Triumph Group currently carries a Zacks Rank #4 (Sell).

A few better-ranked stocks in the same sector are AAR Corp. AIR and Aerojet Rocketdyne AJRD, each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

AAR Corp. delivered an average four-quarter earnings beat of 105.26%. The Zacks Consensus Estimate for fiscal 2021 earnings has risen 170.6% to 92 cents per share in the past 90 days.

Aerojet Rocketdyne delivered an earnings surprise of 9.30% in the last reported quarter. The Zacks Consensus Estimate for 2020 earnings has risen 2.8% to $1.82 per share in the past 90 days.

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