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Cleveland, Ohio-based TransDigm Group Incorporated (TDG) designs, produces, and supplies aircraft components. With a market cap of $72.9 billion, the company provides pumps, valves, motors, actuators, controls, water faucets, disconnects, couplings, rods, batteries, chargers, security systems, engine sensors, lighting, lifting device, and power conditioning components.
Companies worth $10 billion or more are generally described as “large-cap stocks.” TDG effortlessly fits that bill, with its market cap exceeding this mark, underscoring its size, influence, and dominance within the aerospace & defense industry. TDG is a market leader in the aerospace industry, recognized for its highly engineered proprietary aerospace components. The company's strong brand reputation is built on a foundation of high-quality, reliable products and exceptional customer support.
Despite its notable strengths, TDG slipped 5.1% from its 52-week high of $1,380.83, achieved on Aug. 30. Over the past three months, TDG stock has gained marginally, underperforming the Dow Jones Industrials Average’s ($DOWI) 4.8% gains during the same time frame.
In the longer term, shares of TDG rose 29.6% on a YTD basis and climbed 50.3% over the past 52 weeks, outperforming DOWI’s YTD gains of 8.1% and 17.8% returns over the last year.
To confirm the bullish trend, TDG has traded above its 200-day moving average over the past year. It is trading above its 50-day moving average since mid-August.
TDG’s overall performance can be attributed to the application of its value-driven operating strategy, and its recent acquisitions of SEI Industries, the CPI Electron Device Business, and Raptor Scientific.
On Aug. 6, TDG shares closed up more than 2% after reporting its Q3 results. Its adjusted EPS of $9 surpassed Wall Street expectations of $8.45. TransDigm Group’s revenue was $2.1 billion, topping forecasts of $2 billion. The company expects full-year adjusted EPS to be between $32.62 and $33.42 and expects revenue to be between $7.87 billion and $7.93 billion.
Shares of TransDigm Group’s rival, Lockheed Martin Corporation (LMT), have lagged behind the TDG, with a 26.2% uptick on a YTD basis and 35.2% gains over the past 52 weeks.
Wall Street analysts are moderately bullish on TDG’s prospects. The stock has a consensus “Moderate Buy” rating from the 21 analysts covering it, and the mean price target of $1,449.48 suggests a potential upside of 10.6% from current price levels.
On the date of publication, Neha Panjwani 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.
