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TransDigm Group Inc TDG

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Morningstar’s Analysis

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We're Raising TransDigm's Fair Value Estimate To $538 On Higher Revenue Assumptions

Burkett Huey, CFA Equity Analyst

Analyst Note

| Burkett Huey, CFA |

Wide-moat rated TransDigm Group reported a solid fiscal year-end despite the COVID-19 pandemic, and we are raising our fair value estimate to $538 per share from $467 on a substantial revenue increase in our terminal years. Broadly, we think this better reflects our expectation that the company will continue acquiring companies and creating value by driving operational efficiency. TransDigm posted adjusted earnings per share of $2.89, handily beating CapIQ consensus of $1.95.

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Company Profile

Business Description

TransDigm manufactures and services a diverse set of components for commercial and military aircraft. The firm organizes itself in three segments, a power and control segment, an airframe segment, and a small nonaviation segment. The firm operates as an acquisitive holding company that targets firms with proprietary, sole-source products with substantial aftermarket content. The firm regularly employs financial leverage to amplify operating results.

1301 East 9th Street, Suite 3000
Cleveland, OH, 44114
T +1 216 706-2960
Sector Industrials
Industry Aerospace & Defense
Most Recent Earnings Sep 30, 2020
Fiscal Year End Sep 30, 2021
Stock Type Cyclical
Employees 14,200