Triumph Group (TGI) Wins Deal for Next Generation Jammer Pod

Triumph Group, Inc. TGI recently clinched a contract from Raytheon Technologies’ RTX business unit, Raytheon Intelligence & Space, involving the production of air inlets and exhaust electro-mechanical door actuators and an advanced electronic control system for the latter’s Next Generation Jammer Mid-Band (NGJ-MB) pod.

The contract also highlights non-recurring engineering for the product and product enhancement. The work related to the contract will be performed at Triumph Group's Actuation Products & Services facility in Redmond, WA.

With the current deal, Raytheon aims to enhance the functionality of the product by utilizing TGI’s excellence in designing and manufacturing actuators and control systems for NGJ-MB.

Significance of Next Generation Jammer Mid-Band

Raytheon Intelligence & Space's NGJ-MB is the Navy’s advanced electronic attack system that offensively denies, disrupts and degrades enemy technology, including air-defense systems and communications.

Moreover, it uses the latest digital, software-based and active electronically scanned array technologies, which allow operators to non-kinetically attack more targets at a greater distance.

Due to its remarkable features that allow pilots to carry out missions more effectively in highly-contested electromagnetic spectrum environments, RTX is likely to witness a steady inflow of orders involving the jammer.

Meanwhile, this implies multiple contract wins for Triumph Group from Raytheon Technologies because it is the key supplier of manufacturing actuators and controls systems for NGJ-MB. This, in turn, is likely to boost its revenue generation prospects for its Actuation Products & Services business unit.

Prospects for Triumph Group

The recent turbulence between Ukraine and Russia has resulted in nations increasing their defense spending to modernize and upgrade their warfare capabilities. Therefore, an increased focus on improvising military aircraft with efficient actuators and controls systems can also be witnessed for the better functioning of the aircraft.

This tends to boost the growth prospects of companies like Triumph Group that have an established position in the manufacturing of complex electro-hydraulic and mechanical systems and equipment for the aerospace and defense industry. Moreover, the increased demand for military aircraft is likely to boost demand for Triumph Group’s products, thereby bolstering its revenues.

Per the report from Mordor Intelligence, the global military aircraft market is anticipated to witness a CAGR of 4% during the 2022-2031 period. Such abounding growth prospects bode well for TGI as it is the leading supplier of aircraft parts to prominent defense majors like Lockheed Martin LMT.

In March 2022, Triumph Group announced that its Actuation Products & Services operating company secured a multi-year contract with Sikorsky, a Lockheed Martin Company, to produce equipment for the Sikorsky CH-53K. Triumph Group will provide all equipment for the Main Rotor Blade Folding System, the Main Rotor Lag Damper System and the Main Rotor Brake System.

Lockheed Martin’s long-term earnings growth rate is pegged at 5.7%. Shares of LMT have returned 20.7% value to investors in the past year.

Price Movement

In the past year, shares of TGI have rallied 40.5% compared with the industry’s growth of 14.9%.

Image Source: Zacks Investment Research

Zacks Rank

Triumph Group currently carries a Zacks Rank #3 (Hold). One better-ranked stock, carrying a Zacks Rank #2 (Buy), from the same sector is Huntington Ingalls HII. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Huntington Ingalls reported fourth-quarter 2021 adjusted earnings of $2.84 per share, which declined 34.7% from $4.35 reported in the prior-year quarter. Total revenues came in at $2,677 million, lagging the Zacks Consensus Estimate of $2,738.4 million by 2.2%.

The Zacks Consensus Estimate for Huntington Ingalls’ fiscal 2022 earnings indicates an upward revision of 3% in the past 60 days. HII shares have rallied 2.5% in the past year.

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