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TransDigm Group Inc TDG

Morningstar Rating
$1,294.76 −28.89 (2.18%)
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Company Report

TransDigm Earnings: Airlines Driving Strong Aftermarket Parts Demand; Valuation Up 4% to $1040

TransDigm's fiscal second-quarter 2024 results once again demonstrated how well this wide-moat manufacturer of specialty aircraft parts is faring with the postpandemic rebound in aircraft utilization and manufacturing. We have increased our fair value estimate to $1,040 per share from $1,000, primarily due to the time value of money and an uptick in our near-term forecast for original equipment manufacturer sales to the defense market. This represents 31 times our fiscal 2024 earnings estimate and 18 times our estimate of 2024 adjusted EBITDA.

Price vs Fair Value

TDG is trading at a 292% premium.
Price
$1,294.76
Fair Value
$5,165.00
Uncertainty
Medium
1-Star Price
$2,198.00
5-Star Price
$118.00
Economic Moat
Qlzn
Capital Allocation
Fpxfrbpql

Bulls Say, Bears Say

Bulls

Roughly three quarters of TransDigm’s sales are sole-source, which gives it immense pricing power.

Bears

TransDigm may not be able to find appropriate acquisition targets at reasonable prices, which would limit the firm's addressable market.

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News

Trading Information

Previous Close Price
$1,323.65
Day Range
$1,281.371,310.00
52-Week Range
$802.461,369.58
Bid/Ask
$1,023.23 / $1,359.58
Market Cap
$72.45 Bil
Volume/Avg
194,186 / 203,123

Key Statistics

Price/Earnings (Normalized)
42.55
Price/Sales
10.20
Dividend Yield (Trailing)
Dividend Yield (Forward)
Total Yield

Company Profile

TransDigm manufactures and services a diverse set of specialized components and parts for commercial and military aircraft. The firm organizes itself in three segments: a power and control segment, airframes, and a small nonaviation segment, which serves mostly off-road vehicles and mining equipment. It operates as an acquisitive holding company that focuses its portfolio on firms that make proprietary aerospace products with substantial aftermarket demand. TransDigm regularly employs financial leverage to amplify its operating results.
Sector
Industrials
Industry
Aerospace & Defense
Stock Style Box
Large Growth
Total Number of Employees
15,500

Competitors

Valuation

Metric
TDG
PH
RTX
Price/Earnings (Normalized)
42.5520.3320.16
Price/Book Value
5.582.29
Price/Sales
10.203.302.06
Price/Cash Flow
35.2617.3822.23
Price/Earnings
TDG
PH
RTX

Financial Strength

Metric
TDG
PH
RTX
Quick Ratio
2.460.460.64
Current Ratio
3.710.871.07
Interest Coverage
2.687.423.15
Quick Ratio
TDG
PH
RTX

Profitability

Metric
TDG
PH
RTX
Return on Assets (Normalized)
8.63%10.78%2.51%
Return on Equity (Normalized)
30.06%6.05%
Return on Invested Capital (Normalized)
14.75%15.83%5.17%
Return on Assets
TDG
PH
RTX
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Aerospace & Defense Industry Comparables

1-Day Chart
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Morningstar Rating for Stocks
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Economic Moat
Market Cap
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LMT
RcsjnywbyyKyqv$110.0 Bil
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BA
DdkpycwmmMmzy$108.8 Bil
General Dynamics Corp
GD
JzxqlvnbWkp$80.1 Bil
Northrop Grumman Corp
NOC
ZnkptrvbsKfnlk$62.8 Bil
BAE Systems PLC ADR
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Rolls-Royce Holdings PLC ADR
RYCEY
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