/Transdigm%20Group%20Incorporated%20logo%20on%20phone-by%20rafapress%20via%20Shutterstock.jpg){kind=spacer}
Based in Cleveland, Ohio, TransDigm Group Incorporated (TDG), through its wholly-owned subsidiaries, designs, produces, and supplies highly engineered aircraft components globally. Valued at $72.45 billion by market cap, the company’s products mostly serve the aerospace industry and are used in nearly all commercial and military aircraft currently in service. Its major products include ignition systems and engine technology, mechanical/electro-mechanical actuators and controls, power conditioning devices, specialized pumps and valves, high-performance hoists, cockpit security components, and systems.
Companies worth $10 billion or more are generally described as “large-cap stocks,” and TDG fits right into that category, signifying its substantial size, stability, and dominance in its industry.
The leading aircraft components maker has fallen 5.5% from its 52-week high of $1,369.58, which it hit on Jun. 6. Shares of TDG are up 9.2% over the past three months, marginally underperforming the broader Nasdaq Composite’s ($NASX) 9.7% gains over the same time frame.
In the long term, TDG shares have risen 59.7% over the past year, and in 2024, the stock is up 28%. By contrast, the NASX is up 17.8% on a YTD basis and 29.8% over the past 52 weeks.
To confirm the bullish price trend, TDG has been trading above its 50-day moving average since late April and its 200-day moving average since early November 2022.
TDG’s overall performance can be attributed to its strong Q2 results and upward guidance revision for fiscal 2024. The company’s revenue and adjusted EPS beat the consensus estimates. It reported revenue of $1.92 billion, compared to analysts' estimates of $1.89 billion. Also, its adjusted EPS came in at $7.99, surpassing the consensus estimates of $7.37. TDG expects revenue between $7.68 billion and $7.80 billion and adjusted EPS between $31.75 and $33.09.
Rival HEICO Corporation (HEI) has underperformed TDG with 36.6% gains in the past 52 weeks and a 25.9% increase on a YTD basis.
Despite its recent underperformance compared to the NASX, analysts are optimistic about TDG’s prospects. The stock has a consensus rating of “Strong Buy” from the 19 analysts covering it, and the mean price target of $1,423.79 is a 10% premium to current levels.
On the date of publication, Dipanjan Banchur 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.
