On Thursday, RBC Capital Markets updated its outlook on Fortress Transportation (NASDAQ:FTAI) and Infrastructure Investors LLC (NASDAQ: FTAI) stock, raising the price target to $143.00 from $120.00, while reiterating an Outperform rating. The adjustment follows the completion of Fortress Transportation's acquisition of Lockheed Martin (NYSE:LMT) Commercial Engine Solutions (LMCES) on September 9, 2024.
LMCES, a 526,000 square foot aircraft engine maintenance and repair facility located in Montreal, Quebec, was acquired by Fortress Transportation for $170 million. The acquisition is expected to bring about cost savings that will significantly enhance the company's financial performance in the coming years.
According to the analyst's comments, the recent acquisition is projected to increase the adjusted EBITDA for FTAI's Aerospace Products division by approximately $38 million in 2025 and by around $46 million in 2026. These anticipated improvements in profitability underscore the rationale behind the raised price target.
The strategic acquisition of LMCES by Fortress Transportation is anticipated to bolster the company's presence in the aerospace sector, providing a boost to its service capabilities and financial metrics. The positive outlook from RBC Capital Markets reflects confidence in the company's growth trajectory following this recent expansion move.
In other recent news, Fortress Transportation and Infrastructure Investors LLC reported robust results for the second quarter of 2024, with revenues soaring to $444 million, outpacing consensus forecasts by 27%. Despite an adjusted EBITDA margin of 48%, the company posted a loss of $2.26 per share, largely due to a one-time internalization fee of $300 million. BTIG, RBC Capital Markets, and Compass Point responded to these developments by raising their price targets for Fortress Transportation to $140, $120, and $118 respectively, while maintaining Buy ratings.
Stifel also upgraded Fortress Transportation from Hold to Buy, setting a new price target of $132 based on the company's growth prospects. This optimism was tempered by Wolfe Research, which downgraded the company's stock from Outperform to Peer Perform.
In addition to these financial updates, Fortress Transportation announced plans to acquire Lockheed Martin Commercial Engine Solutions for $170 million through its subsidiary, FTAI Aviation, with the aim of strengthening its Maintenance, Repair, and Exchange business. These recent developments highlight the dynamic activity surrounding Fortress Transportation as it navigates its financial and strategic landscape.
InvestingPro Insights
Fortress Transportation and Infrastructure Investors LLC (FTAI) has recently been a subject of interest for analysts, with two of them revising their earnings projections upward for the upcoming period. This optimism may be tied to the company's strategic moves, such as the acquisition of Lockheed Martin Commercial Engine Solutions. The acquisition is expected to contribute to the company's revenue growth, which has already seen a significant uptick of 61.69% in the most recent quarter of 2024. Furthermore, FTAI has delivered a strong return over the last year, with a year-to-date price total return of 175.73%, reflecting the market's positive reception of the company's performance and strategic initiatives.
InvestingPro data indicates that FTAI operates with a moderate level of debt and liquid assets that exceed short-term obligations, providing a degree of financial stability. However, the company's profitability metrics suggest challenges, with a high Price / Book multiple of 186.18 and a negative Return on Assets of -0.69% in the last twelve months as of Q2 2024. These figures point to a valuation that may be considered stretched by traditional metrics, which is a crucial consideration for investors.
For those interested in a deeper analysis, there are additional InvestingPro Tips available that provide further insights into FTAI's financial health and market performance. To explore these tips and gain a more comprehensive understanding of Fortress Transportation's investment potential, visit InvestingPro at https://www.investing.com/pro/FTAI.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.