Transdigm Group (NYSE:TDG) Posts Earnings Results, Beats Expectations By $0.57 EPS

Transdigm Group (NYSE:TDG) issued its quarterly earnings results on Tuesday. The aerospace company reported $10.87 EPS for the quarter, beating the consensus estimate of $10.30 by $0.57, FiscalAI reports. Transdigm Group had a net margin of 19.69% and a negative return on equity of 23.65%. The business had revenue of $2.74 billion during the quarter, compared to the consensus estimate of $2.68 billion. During the same quarter in the prior year, the firm earned $9.60 EPS. The firm’s quarterly revenue was up 22.5% on a year-over-year basis. Transdigm Group updated its FY 2026 guidance to 40.620-41.460 EPS.

Here are the key takeaways from Transdigm Group’s conference call:

• Fiscal 2026 guidance was raised after a better-than-expected third quarter, with revenue guidance increasing to $10.51 billion and EBITDA As Defined guidance to $5.52 billion. The company now expects roughly 19% revenue growth and a 52.5% EBITDA margin.
• Growth was broad-based, with commercial OEM revenue up 17%, commercial aftermarket up 17% and defense revenue up 11% year over year. Strong bookings, rising Boeing and Airbus production rates, and defense backlog support continued momentum into fiscal 2027.
• TransDigm generated approximately $870 million of quarterly free cash flow and raised full-year free cash flow guidance to about $2.6 billion. It also repurchased roughly $980 million of stock during the quarter, bringing year-to-date repurchases to $1.8 billion.
• The company agreed to acquire Prince & Izant for approximately $1.1 billion, adding a mostly aftermarket supplier of highly engineered brazing alloys and specialty metal components. Management said the deal fits its aerospace-and-defense-focused acquisition strategy and that it retains more than $10 billion of M&A capacity.
• TransDigm withdrew from the proposed Stellent acquisition after the Department of Justice indicated it would challenge the transaction, highlighting potential regulatory hurdles for future deals. The company also carries substantial leverage, with net debt at 5.8 times EBITDA, while Middle East-related flight declines remain a potential risk despite no material impact so far.

Transdigm Group Price Performance

Shares of NYSE TDG traded up $7.30 during trading hours on Thursday, hitting $1,262.01. 141,465 shares of the stock were exchanged, compared to its average volume of 395,620. The firm has a market capitalization of $70.59 billion, a P/E ratio of 38.22, a P/E/G ratio of 2.25 and a beta of 0.91. The company’s 50 day moving average is $1,271.99 and its 200 day moving average is $1,262.56. Transdigm Group has a one year low of $1,123.61 and a one year high of $1,463.03.

Insiders Place Their Bets

In other news, Director W Nicholas Howley sold 10,132 shares of Transdigm Group stock in a transaction dated Monday, July 20th. The shares were sold at an average price of $1,216.08, for a total transaction of $12,321,322.56. Following the sale, the director directly owned 21,548 shares in the company, valued at approximately $26,204,091.84. The trade was a 31.98% decrease in their position. The sale was disclosed in a legal filing with the Securities & Exchange Commission, which is accessible through the SEC website. Also, COO Joel Reiss sold 3,900 shares of the company’s stock in a transaction that occurred on Monday, June 15th. The shares were sold at an average price of $1,276.78, for a total value of $4,979,442.00. Following the completion of the sale, the chief operating officer owned 3,600 shares in the company, valued at approximately $4,596,408. This represents a 52.00% decrease in their ownership of the stock. Additional details regarding this sale are available in the official SEC disclosure. Over the last three months, insiders sold 38,196 shares of company stock valued at $47,135,464. Insiders own 3.20% of the company’s stock.

Institutional Trading of Transdigm Group

Large investors have recently bought and sold shares of the stock. State Street Corp lifted its holdings in shares of Transdigm Group by 2.8% during the fourth quarter. State Street Corp now owns 2,456,186 shares of the aerospace company’s stock valued at $3,266,359,000 after acquiring an additional 67,348 shares during the period. Invesco Ltd. increased its position in shares of Transdigm Group by 1.4% during the 4th quarter. Invesco Ltd. now owns 427,968 shares of the aerospace company’s stock worth $569,133,000 after purchasing an additional 6,087 shares in the last quarter. Charles Schwab Investment Management Inc. lifted its holdings in Transdigm Group by 2.2% during the 4th quarter. Charles Schwab Investment Management Inc. now owns 396,578 shares of the aerospace company’s stock valued at $527,389,000 after purchasing an additional 8,451 shares during the last quarter. Bank of America Corp DE boosted its position in Transdigm Group by 2.0% in the second quarter. Bank of America Corp DE now owns 359,563 shares of the aerospace company’s stock valued at $546,766,000 after buying an additional 6,947 shares in the last quarter. Finally, UBS AM a distinct business unit of UBS ASSET MANAGEMENT AMERICAS LLC grew its stake in Transdigm Group by 4.7% during the fourth quarter. UBS AM a distinct business unit of UBS ASSET MANAGEMENT AMERICAS LLC now owns 289,814 shares of the aerospace company’s stock worth $385,409,000 after buying an additional 12,881 shares during the last quarter. 95.78% of the stock is currently owned by institutional investors.

Analyst Ratings Changes

Several analysts have issued reports on the stock. Deutsche Bank Aktiengesellschaft boosted their target price on shares of Transdigm Group from $1,306.00 to $1,350.00 and gave the company a “hold” rating in a research note on Wednesday, May 6th. Wall Street Zen downgraded Transdigm Group from a “buy” rating to a “hold” rating in a report on Monday, July 20th. Royal Bank Of Canada dropped their price target on Transdigm Group from $1,400.00 to $1,350.00 and set a “sector perform” rating on the stock in a research report on Wednesday, May 6th. Weiss Ratings downgraded Transdigm Group from a “hold (c+)” rating to a “hold (c)” rating in a research note on Tuesday, June 2nd. Finally, Jefferies Financial Group raised their price objective on Transdigm Group from $1,565.00 to $1,575.00 in a research report on Monday, May 11th. Six research analysts have rated the stock with a Buy rating and eleven have assigned a Hold rating to the company’s stock. According to data from MarketBeat, Transdigm Group currently has an average rating of “Hold” and a consensus price target of $1,472.80.

About Transdigm Group

TransDigm Group Incorporated is a designer, producer and supplier of engineered aircraft components and systems for commercial and military aerospace applications. The company’s product portfolio covers a broad range of mission-critical parts and subsystems, including mechanical and electromechanical components, ignition and fuel system parts, sensors and actuators, cockpit and cabin systems, and other safety-critical hardware. TransDigm supplies original equipment manufacturers (OEMs) as well as the aftermarket, providing spare parts, repair and overhaul services and component support throughout an asset’s life cycle.

TransDigm’s operating model places emphasis on proprietary, niche components that are difficult to replace, and the company operates through a collection of independently run subsidiaries and brands that sell specialized products.