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TransDigm Group Incorporated (TDG), headquartered in Cleveland, Ohio, designs, manufactures, and markets aircraft components and systems. Valued at $74.8 billion by market cap, the company provides mechanical and electromechanical actuators, power and control systems, engineered latching devices, cockpit and cabin systems, safety restraints, and testing equipment.
Shares of this aerospace giant have underperformed the broader market over the past year. TDG has gained 12.3% over this time frame, while the broader S&P 500 Index ($SPX) has rallied nearly 17.5%. However, in 2025, TDG stock is up 5.2%, surpassing the SPX’s 1.3% rise on a YTD basis.
Narrowing the focus, TDG’s underperformance is also apparent compared to Invesco Aerospace & Defense ETF (PPA). The exchange-traded fund has gained about 19.2% over the past year. However, TDG’s single-digit gains on a YTD basis outshine the ETF’s marginal returns over the same time frame.
TDG's recent underperformance can be attributed to uneven performance in OEM and aftermarket revenue streams, as well as supply chain disruptions that particularly impacted the commercial OEM sector.
On Feb. 4, TDG shares closed down more than 3% after reporting its Q1 results. Its adjusted EPS of $7.83 exceeded Wall Street expectations of $7.48. The company’s revenue was $2.01 billion, topping Wall Street forecasts of $1.99 billion. TDG expects full-year adjusted EPS in the range of $35.51 to $37.43, and expects revenue to be between $8.8 billion and $9 billion.
For the current fiscal year, ending in September, analysts expect TDG’s EPS to grow 10.7% to $35.13 on a diluted basis. The company’s earnings surprise history is impressive. It beat the consensus estimate in each of the last four quarters.
Among the 21 analysts covering TDG stock, the consensus is a “Strong Buy.” That’s based on 15 “Strong Buy” ratings, one “Moderate Buy,” and five “Holds.”
This configuration is more bullish than a month ago, with an overall “Moderate Buy” rating, consisting of 13 analysts suggesting a “Strong Buy.”
On Feb. 24, UBS analyst Gavin Parsons upgraded to a “Buy” rating on TDG with a price target of $1595, implying a potential upside of 19.7% from current levels.
The mean price target of $1506.45 represents a 13% premium to TDG’s current price levels. The Street-high price target of $1611 suggests an upside potential of 20.9%.
