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With a market cap of $76.84 billion, TransDigm Group Incorporated (TDG) is a leading designer, producer, and supplier of highly engineered aerospace components headquartered in Cleveland, Ohio. The company is known for its specialized solutions in the aerospace and defense industries.
TDG has significantly outperformed the broader market over the last year. The stock has gained 53.7% over this time frame, while the broader S&P 500 Index ($SPX) has rallied nearly 25.6%. In 2024, the stock has gained 35.8%, compared to SPX's 18.4% gains on a YTD basis.
Narrowing the focus, TDG also outperformed the SPDR S&P Aerospace & Defense ETF (XAR). The exchange-traded fund has gained 14.8% on a YTD basis.
TDG reported Q3 earnings on Aug. 6. The company reported a profit of $461 million, or $9 per share, surpassing the Wall Street expectations of $8.45 per share. Also, the company's revenue of $2.05 billion surpassed analysts’ expectations of $1.99 billion. TransDigm expects full-year earnings in the range of $32.62 to $33.42 per share, with revenue in the range of $7.87 billion to $7.93 billion. The stock gained 2.3% on the day of the earnings release.
For the current fiscal year, ending in September, analysts expect TDG’s EPS to grow 29.2% to $30.57 on a diluted basis. The company's earnings surprise history is robust. It beat the consensus estimate in all four quarters.
Among the 21 analysts covering TDG stock, the consensus rating is a “Moderate Buy.” That’s based on 14 “Strong Buy” ratings, one “Moderate Buy,” and six “Holds.”
The configuration is more bullish than three months ago, with 12 analysts suggesting a “Strong Buy.”
On Aug. 16, Philip Gibbs from KeyBanc reiterated a “Buy” rating on TransDigm Group, with a price target of $1,440.00, which indicates a 4.9% upside from the current levels.
The mean price target of $1,445.43 represents a 5.3% premium to TDG’s current price levels. The Street-high price target of $1,648.00 suggests an upside potential of 20%.
On the date of publication, Rashmi Kumari 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.
