TransDigm Group Incorporated Just Beat Analyst Forecasts, And Analysts Have Been Updating Their Predictions

Shareholders might have noticed that TransDigm Group Incorporated (NYSE:TDG) filed its quarterly result this time last week. The early response was not positive, with shares down 2.9% to US$1,231 in the past week. The result was positive overall - although revenues of US$2.0b were in line with what the analysts predicted, TransDigm Group surprised by delivering a statutory profit of US$7.96 per share, modestly greater than expected. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

See our latest analysis for TransDigm Group

Taking into account the latest results, the current consensus from TransDigm Group's 21 analysts is for revenues of US$8.87b in 2025. This would reflect a meaningful 17% increase on its revenue over the past 12 months. Per-share earnings are expected to surge 30% to US$36.21. Before this earnings report, the analysts had been forecasting revenues of US$8.76b and earnings per share (EPS) of US$35.43 in 2025. So the consensus seems to have become somewhat more optimistic on TransDigm Group's earnings potential following these results.

There's been no major changes to the consensus price target of US$1,455, suggesting that the improved earnings per share outlook is not enough to have a long-term positive impact on the stock's valuation. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. Currently, the most bullish analyst values TransDigm Group at US$1,648 per share, while the most bearish prices it at US$1,100. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. The analysts are definitely expecting TransDigm Group's growth to accelerate, with the forecast 13% annualised growth to the end of 2025 ranking favourably alongside historical growth of 7.2% per annum over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 2.7% per year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect TransDigm Group to grow faster than the wider industry.

The Bottom Line

The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards TransDigm Group following these results. Fortunately, they also reconfirmed their revenue numbers, suggesting that it's tracking in line with expectations. Additionally, our data suggests that revenue is expected to grow faster than the wider industry. The consensus price target held steady at US$1,455, with the latest estimates not enough to have an impact on their price targets.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have estimates - from multiple TransDigm Group analysts - going out to 2026, and you can see them free on our platform here.

Don't forget that there may still be risks. For instance, we've identified 3 warning signs for TransDigm Group (2 are potentially serious) you should be aware of.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.