TransDigm Continues to Recover With Increased Commercial Flight Activity

Wide-moat-rated TransDigm posted continued revenue growth and strong margins as the high-margin commercial aftermarket continues to recover with increased commercial flight activity. Revenue of $1.4 billion missed FactSet consensus estimates by 0.4%, but adjusted earnings per share of $4.85 beat these same estimates by 10.6%. After adjusting our model with fiscal third-quarter earnings, we are increasing our fair value estimate for TransDigm to $650 per share from $640 as the effect of the time value of money was partially offset by lower acquisition spend assumptions.