Triumph Group downgraded at J.P. Morgan on cash flow shortcomings

Triumph Group (NYSE:TGI) on Monday was downgraded to Underweight from a previous investment rating of Neutral by analysts at financial-services firm J.P. Morgan who said the aerospace and defense company’s cash flow outlook is disappointing.

The bank’s downgrade comes several days after Triumph’s (TGI) stock soared on a news report that management had enlisted advisers to explore a possible sale of the company.

Triumph (TGI) “has faced multiple challenges resetting the company over the past decade and management has accomplished a great deal,” according to J.P. Morgan. “Nevertheless, cash flow improvement has fallen consistently short of expectations and June quarter results seemed were setting up for FY25 to continue this pattern.”

A key concern for Triumph (TGI) is the negative effects of a prolonged strike by thousands of workers at key customer Boeing (NYSE:BA). Triumph (TGI) supplies multiple components for Boeing’s (BA) best-selling 737 Max jetliner.

Boeing (BA) is seeking ways to curtail mounting losses as the work stoppage prevents the delivery of finished planes to customers.