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Based in Cleveland, Ohio, TransDigm Group Incorporated (TDG), with a market cap of $77.12 billion, designs, produces, and supplies aircraft components in the United States and internationally. The company offers mechanical/electro-mechanical actuators and controls, ignition systems and engine technology, specialized pumps and valves, power conditioning devices, specialized AC/DC electric motors and generators.
Companies valued at $10 billion or more are generally classified as “large-cap” stocks, and TDG fits this criterion perfectly, exceeding the mark. As a leading figure in the aerospace and defense industry, TDG capitalizes on increased defense spending and global uncertainty.
However, the defense giant has fallen 7.4% from its 52-week high of $1,451.32, which it hit on October 2. Over the past three months, TDG shares have grown 5.1%, outperforming iShares U.S. Aerospace & Defense ETF (ITA), which declined 1.8% during the same period.
Moreover, in the longer term, TDG shares have surged 3.9% over the past six months and 15.1% over the past 52 weeks. By contrast, ITA has surged 6.8% over the past six months and 15.4% over the past 52 weeks.
Despite fluctuations, TDG has been trading well above its 50-day and 200-day moving averages since end of Feb.
On Feb. 4, TDG shares closed down more than 3% after reporting its Q1 results. The company reported a 12% increase in its net sales, amounting to $2.01 billion. Moreover, its EPS came in at $7.57, surpassing the Wall Street EPS estimates by 12.5%.
In the highly competitive defense industry, TDG’s rival, General Dynamics Corporation (GD), has lagged behind, declining 9.6% over the past six months and 3.3% over the past 52 weeks.
Moreover, Wall Street analysts remain strongly bullish on TDG’s prospects. The stock holds a consensus “Strong Buy” rating from the 21 analysts covering it. The mean target of $1,506.45 suggests a potential upside of 12% from the current market prices.
On the date of publication, Kritika Sarmah did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
