tiprankstipranks
A Look Fortress Transportation’s Newly Added Risk Factor
Market News

A Look Fortress Transportation’s Newly Added Risk Factor

Fortress Transportation (FTAI) is an American infrastructure and equipment leasing company with a global footprint. Its solutions are essential for transporting people and products around the world.

Let’s take a look at the company’s latest financial performance, corporate developments, and newly added risk factor. (See Fortress Transportation stock charts on TipRanks).

Q2 Financial Results

The company reported revenue of $96.92 million for Q2 2021. That compared to revenue of $94.31 million in the same quarter last year and fell short of the consensus estimate of $113.48 million. It posted a loss per share of $0.42, compared to a loss per share of $0.18 in the same quarter last year. The consensus estimate called for a loss per share of $0.13.

Fortress ended Q2 with $143.25 million in cash and $2.13 billion in net debt.

Corporate Developments

The company completed the acquisition of Transtar from United States Steel Corporation (X) for $640 million in cash. Transtar is a railroad transportation provider. Fortress borrowed $650 million to finance the Transtar acquisition and pay related fees.

Following the closing of the Transtar acquisition, Fortress announced on September 9 that it was raising $306 million through an equity offering. It said it would use the money from the offering to repay part of the loan it obtained to finance the acquisition.

Fortress has secured a deal to provide rail services to the United States Steel Corporation for at least 15 years. Additionally, the company has entered into a 10-year deal with Exxon Mobil Corporation (XOM) to create a refined products hub.

Risk Factors

The new TipRanks Risk Factors tool reveals 69 risk factors for Fortress Transportation. Since Q4 2020, the company has updated its risk profile with one new risk factor under the Finance and Corporate category.

Fortress cautions investors that it may not fully achieve the anticipated benefits of the Transtar acquisition. It says that it could face difficulties in integrating the business and incur unexpected costs. Fortress tells investors that Transtar relies on its seller as its primary customer.

Additionally, Fortress says that it will rely on the Transtar seller to provide certain services related to the transition of the business. Therefore, any failure by the seller to assist as necessary could adversely affect the integration of Transtar.

The majority of Fortress’ risk factors fall under the Finance and Corporate category, with 64% of the total risks. That is above the sector average of 59%. Fortress stock has gained about 8% year-to-date.

Analysts’ Take

Following the closing of the Transtar acquisition, Barclays analyst Brandon Oglenski initiated coverage of Fortress Transportation stock with a Buy rating and a price target of $31. Oglenski’s price target suggests 21.90% upside potential.

The analyst noted that Fortress has a bright future, citing aviation leasing growth. Further, Oglenski highlighted that Fortress’ management will expand revenue opportunities for Transtar.

Consensus among analysts is a Strong Buy based on 7 Buys. The average Fortress Transportation price target of $39.43 implies 55.05% upside potential to current levels.

Related News:
Tesla’s Shanghai Factory Produced 300,000 Cars Amid Chip Shortages – Report
Middleby Acquires Imperial Commercial Cooking Equipment
Roku Introduces Streaming Player Line-Up in Germany

Trending

Name
Price
Price Change
S&P 500
Dow Jones
Nasdaq 100
Bitcoin

Popular Articles