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Valued at a market cap of $71.9 billion, Cleveland, Ohio-based TransDigm Group Incorporated (TDG) is a leading global designer, producer, and supplier of highly engineered aircraft components for both commercial and military aviation. Its product offerings include mechanical actuators, ignition systems, cockpit displays, safety restraints, and many other advanced technologies.
Companies worth more than $10 billion are generally labeled as “large-cap” stocks and TransDigm Group fits this criterion perfectly. With a broad range of specialized products, the company serves a variety of industries, including aerospace, off-road vehicles, and heavy equipment. It operates internationally through its various subsidiaries.
Despite an 11.9% decline from its 52-week high of $1,451.32 reached in October, shares of this aircraft components maker have declined 1.2% over the past three months, lagging behind the Industrial Select Sector SPDR Fund’s (XLI) 11.7% return over the same time frame.
However, in the longer term, TDG stock is up 26.5% on a YTD basis, surpassing XLI’s 23.3% gain. Shares of TDG have gained 32.8% over the past 52 weeks, compared to XLI’s 29.5% return over the same time frame.
Yet, TDG has been trading below its 50-day moving average since late October and it stayed below its 200-day moving average since mid-November despite a few fluctuations.
Despite reporting stronger-than-expected Q4 adjusted EPS of $9.83 and sales of $2.2 billion, shares of TDG fell 3.9% on Nov. 7 due to disappointing fiscal 2025 guidance and concerns about production challenges in the aerospace industry. The company’s adjusted EPS forecast of $35.36 – $37.28 and sales guidance of $8.8 billion – around $9 billion were below analysts’ expectations, with the midpoint of both ranges falling short of consensus estimates. Additionally, uncertainties around Boeing's post-strike production recovery and ongoing supply chain pressures at Airbus raised doubts about the pace of OEM sales growth, further weighing on market sentiment.
Nevertheless, TDG has outpaced its rival, General Dynamics Corporation (GD), which saw a 4.7% increase on a YTD basis and a 7.9% gain over the past 52 weeks.
As TDG has outperformed the broader sector, analysts remain bullish about its prospects. The stock has a consensus rating of “Strong Buy” from 21 analysts' coverage, and as of writing, TDG is trading below the mean price target of $1,504.30.
