Tuesday, FBR Capital Markets initiated coverage of RTI International Metals, Inc. (RTI) stock with an Outperform rating and a price target of $30. The brokerage established its 2009 loss per share estimate of $0.01 on revenue of $408.4 million, and its 2010 EPS estimate of $0.46 on revenue of $423.1 million.
Analyst Patrick McCarthy believes the company is well positioned to take advantage of a recovery within commercial aerospace markets and to capitalize on opportunities in both military aircraft and other defense programs.
Despite near-term headwinds, the stock, given its current valuation, offers an attractive risk-reward scenario for the long term, in the analyst's view. RTI currently has long-term agreements with three major commercial original equipment manufacturers and defense prime contractors that should yield more than $5.0 billion in future revenue. The analyst's price target of $30.00 implies a 10.7x 2011 EBITDA multiple.
The analyst's top-line forecast of $408.4 million translates into $0.01 in loss per share for 2009, down significantly from EPS of $2.42 in 2008. The year-over-year earnings reduction is primarily a function of weak commercial aerospace trends combined with the high fixed-cost nature of the business.
The analyst forecasts that earnings will start to improve in 2010, albeit at levels well below the company's peak potential peak. The analyst's 2010 revenue and EPS estimates are $423.1 million, 3.6% growth, and $0.46, respectively, followed by revenue and EPS growth of 27% and 98%, respectively, for 2011.
Currently, RTI is up $2.01 or 8.78% and trading at $24.90.
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June 05, 2026 16:18 ET A busy week for economic news flow saw a slew of reports being released that reflected the trends in the U.S. labor market. In Europe, economic growth and inflation data gained attention as the European Central Bank and Bank of England head for policy session later in the month. In Asia, the monetary policy session of the Indian central bank was in focus as the country, a major oil importer, reels under the pressures of a weaker rupee and rising inflation.