TransDigm Group is the IBD Stock Of The Day for Thursday. Shares have held relatively steady near record highs. Now, TDG stock is closing in on a buy point.
Collectively, the 71 stocks in the aerospace and defense industry group have managed a 2.9% gain in 2025 while the rest of the U.S. stock market has tumbled into correction territory. Recently, there has been a dramatic shift in the sector.
The European Union plans to ramp up domestic defense production, as the U.S. withdrawal of support for the defense of Ukraine against Russia's attacks. The U.S. has served as a moderator between the countries as they attempt to fashion an agreement for "lasting peace." So far, Ukraine and Russia appear to have very different views about what that "peace" entails.
TransDigm In 2025
Amid that backdrop, TransDigm has advanced about 8% in 2025. The aerospace parts and components provider in early February posted mixed Q1 results, with revenue coming in just below estimates.
UBS on Feb. 24 upgraded TDG stock to buy from neutral, and hiked its price target to 1,595 from 1,502, The Fly reported. The firm expects TransDigm's aftermarket growth to stabilize and accelerate from Q1. UBS is pricing in above-consensus margin expansion and the potential for an increase in capital deployment. TransDigm is a "compounder of earnings organically and inorganically, with a recurring and often sole-source business model," the firm wrote. UBS also believes a more acquisition-friendly environment could provide further upside.
TransDigm Stock Analysis
TDG stock is building a flat base with a 1424.68 buy point. Investors could use 1382.11 as an early-entry handle within the pattern.
Shares on Oct. 2 hit a record high of 1451.32. TDG stock is holding support above its key moving averages.
TransDigm has a 21-Day ATR% of 2.46.
The average true range is a metric available on IBD's MarketSurge charting tool. It gauges the characteristic breadth of a stock's behavior. Stocks that tend to make large jumps or dives in daily action, the kind that can trigger sell rules and shake investors out of a stock, have a high ATR. Stocks that tend to make more incremental moves have lower ATRs.
In the current, unpredictable market, IBD suggests stocks with ATRs of 3 or below.
IBD's Stock Market Exposure guide currently recommends investors have a maximum of 20% of their capital invested. Now is a good time to build watchlists and wait for a follow-through day to launch a new rally.
You can follow Harrison Miller for more stock news and updates on X/Twitter @IBD_Harrison
