On Thursday, RBC Capital Markets adjusted its financial outlook for Fortress Transportation (NASDAQ: NASDAQ:FTAI) stock, raising the price target to $120 from $110, while reiterating an Outperform rating. The revision follows the company's reported revenue of $444 million, which surpassed the consensus forecast by 27% and RBC Capital's own projection by 24%.
Adjusted EBITDA for the company reached $214 million, exceeding the consensus expectations. However, adjusted earnings per share (EPS) were negatively affected, showing a loss of $2.26 due to a $300 million charge related to the firm's management internalization process.
Fortress Transportation's second-quarter results for 2024 have prompted the company to significantly increase its guidance for both 2024 and 2026. This optimistic adjustment is largely driven by expected stronger growth in the Aerospace Products segment, which is becoming an increasingly important part of the business.
The company's financial performance and raised outlook come amid a broader industry context where concerns about the pace of new aircraft deliveries could potentially benefit Fortress Transportation. The firm's recent results and updated forecasts reflect its capacity to navigate the current market dynamics effectively.
RBC Capital maintains confidence in Fortress Transportation's trajectory, as evidenced by the maintained Outperform rating and the increased price target. The target adjustment to $120 indicates RBC Capital's expectation for the stock's continued positive performance in the market.
In other recent news, Fortress Transportation and Infrastructure Investors LLC has been the focus of several notable developments. Compass Point has increased the company's stock target to $118, reflecting a positive outlook on its future earnings, particularly within the aerospace products segment.
This optimism is fueled by the expected positive revisions to estimates and the potential approval of Parts Manufacturer Approval, which could add significant additional earnings.
Wolfe Research, however, has downgraded Fortress Transportation's stock from Outperform to Peer Perform, suggesting that the current valuation may limit further upside potential.
Despite this, Deutsche Bank (ETR:DBKGn) has maintained a Buy rating on the company and increased the price target to $100, following Fortress Transportation's announcement of a five-year maintenance services contract with International Aero Engines for V2500 engines.
RBC Capital Markets has also adjusted its outlook on Fortress Transportation, increasing the price target to $95 while maintaining an Outperform rating. This adjustment is a response to the company's new maintenance service agreement with IAE AG for V2500 engines, which is expected to contribute positively to the company's Aerospace Products EBITDA in the coming years.
Furthermore, through its subsidiary, FTAI Aviation, Fortress Transportation has announced its intent to acquire Lockheed Martin (NYSE:LMT) Commercial Engine Solutions from Lockheed Martin Canada for $170 million. This acquisition aims to bolster FTAI's Maintenance, Repair, and Exchange business.
The company has also concluded its Management Agreement and Services and Profit Sharing Agreement with Fortress Investment Group LLC, transitioning to an internally managed structure.
InvestingPro Insights
Fortress Transportation and Infrastructure Investors LLC (NASDAQ: FTAI) has been on a remarkable trajectory, with InvestingPro data highlighting a significant 234.99% one-year price total return as of the latest data. This performance is supported by a robust 28.22% revenue growth over the last twelve months as of Q2 2024, showcasing the company's strong financial momentum. Additionally, the company's gross profit margin stands at an impressive 47.76%, indicating a healthy profitability potential despite the firm's current non-profitable status.
InvestingPro Tips for FTAI suggest that while the company has not been profitable over the last twelve months, analysts predict it will turn profitable this year. This is a crucial indicator for potential investors considering the company's future prospects. Moreover, the stock's volatility is something investors should be aware of, as it could impact short-term investment strategies. For those looking for more in-depth analysis, there are 13 additional InvestingPro Tips available, which can be accessed through InvestingPro's product offerings. Utilize coupon code PRONEWS24 to get up to 10% off a yearly Pro and a yearly or biyearly Pro+ subscription, and gain access to a wealth of investment insights.
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