TransDigm Group: A Leader in Aerospace Components Faces Market Challenges
TransDigm Group Incorporated (TDG), valued at about $71 billion, remains a key player in the aerospace industry, known for designing and supplying expertly engineered aircraft components. Their extensive range of products includes vital parts such as actuators, ignition systems, power conditioning devices, specialized pumps, advanced cockpit displays, and many safety and performance items.
Despite its strong reputation, TDG’s stock performance has been somewhat disappointing compared to the broader market. Over the past year, TDG shares have risen by approximately 28%, which is slightly lower than the S&P 500 Index’s ($SPX) return of 31.8%. So far in 2024, the stock has gained 23.5%, also trailing behind the SPX’s 25.8% increase.
Even so, evaluating the situation in more detail shows that TDG has outperformed the iShares Global Industrials ETF’s (EXI) return of 26.9% over the last year and its 17.8% gain so far this year.
TDG’s fiscal 2024 Q4 earnings report on November 7 impressed the market, surpassing Wall Street’s expectations for both revenue and earnings. The company reported net sales of $2.2 billion, marking an 18% increase compared to the previous year, and slightly exceeding analysts’ forecasts. Additionally, TransDigm’s adjusted EPS was $9.83, reflecting a strong 22% year-over-year rise and beating estimates by almost 6%.
Looking ahead to the fiscal year ending in September 2025, analysts anticipate a 9.8% increase in EPS to $34.86 for TDG. Notably, the company’s history of earnings surprises is impressive, as it has surpassed consensus estimates in all four of the last quarters.
Among the 21 analysts covering TDG, the outlook is strongly favorable with a consensus rating of “Strong Buy,” which includes 15 “Strong Buy,” one “Moderate Buy,” and five “Hold” ratings. This consensus has remained relatively stable over the past three months.
On November 14, J.P. Morgan (JPM) revised TDG’s price target downward from $1555 to $1500, maintaining a “Neutral” rating on the stock. This target still suggests an upside of nearly 20.1% based on current prices.
Additionally, the average price target set by analysts is $1499.65, indicating a modest potential upside of about 20%. Notably, the highest price target in the analyst community stands at $1660, suggesting that TDG shares could rise by as much as 32.9% from current levels.
On the date of publication, Anushka Mukherjee did not hold any positions in the securities mentioned in this article. All information and data is provided for informational purposes only. For more details, please refer to the Barchart Disclosure Policy here.
The views and opinions expressed herein are those of the author and do not necessarily reflect the views of Nasdaq, Inc.
