TDG
TransDigm Group Incorporated$1320.56
Unclear
Target $1332.20
Report: Mar 08, 2026Industrials • Aerospace & Defense • Mature CompounderSnapshot
Decision-first overview with recommendation, valuation anchor, and current setup.
Company Overview
Research Snapshot
Price History
Pelican View
Current$1320.56+0.9%
Rec: UnclearConviction: Medium
Entry Target
$1024.77
(22% below current)
Fair Value
$1332.20
(1% above current)
Stop Loss
$908.69
(31% below current)
Position Size
Starter
Time Horizon
Long-Term
Key Metrics
Live Snapshot
Market Data
52 Week High$1,623.83
52 Week Low$1,126.70
Avg. 3 Month Volume393K
Efficiency
LTM Gross Margin59.6%
LTM EBITDA Margin50.8%
LTM EBIT Margin46.7%
LTM Operating Margin46.5%
LTM ROA7.9%
LTM ROE-24.4%
LTM ROIC13.6%
LTM ROCE20.9%
Capital Structure
Market Cap (MM)$65.5B
Enterprise Value (MM)$93.0B
Shares Outstanding58.20M
Total Debt (MM)$30.05B
Cash & Equivalents (MM)$2.53B
LTM Net Debt (MM)$27.52B
LTM Net Debt/EBITDA5.9x
Growth
TTM Rev. Growth11.7%
Last 3-Yr Rev. CAGR17.4%
Last 3-Yr EBITDA CAGR21.5%
Last 3-Yr EPS CAGR28.2%
Valuation
Street Target Price$1,590.33
LTM EV/Revenue10.2x
LTM EV/Gross Profit17.1x
LTM EV/EBIT21.9x
LTM EV/EBITDA20.1x
LTM P/E36.2x
LTM EV/FCF49.5x
LTM P/FCF34.9x
LTM P/TB7.4x
LTM P/B-7.1x
Dividend Yield7.8%
Payout Ratio289.4%
Executive SummarySituation: Current price is $1320.56 versus fair value $1332.2 (0.9% expected return), and valuation confidence is stable. Debate: Bull case depends on Integration of the $2.2 billion Jet Parts Engineering and Victor Sierra acquisitions. Bear case centers on Department of Defense pricing scrutiny and potential legislative changes to procurement laws. Conclusion: Recommendation is Unclear; maintain no position until reliability and catalyst evidence improve.
Bull Case
Durable 47% operating margins protected by a 90% proprietary product mix and a massive $10 billion M&A capacity. Strong secular tailwinds from the commercial aviation recovery and increased defense spending support double-digit revenue growth.
Bear Case
Extreme financial risk with 6.0x net leverage and negative equity of $9.7 billion. Potential for structural margin compression if DoD successfully mandates cost-plus pricing on sole-source parts.
Key Catalysts
Mid-Term (6-18 months)Impact: High
Integration of the $2.2 billion Jet Parts Engineering and Victor Sierra acquisitions. Successful integration would validate the M&A engine's...
Near-Term (0-6 months)Impact: Moderate
Re-acceleration of Boeing 737 MAX and 777X production rates. This would drive commercial OEM revenue, which was a headwind in FY2025, and se...
Long-Term (18+ months)Impact: Moderate
TransDigm is relevant for analysis following its Q1 FY2026 earnings beat and the completion of its CEO transition, as the market evaluates t...
Primary Risks
Concern: High
Department of Defense pricing scrutiny and potential legislative changes to procurement laws. If the DoD successfully proves systemic overch...
Concern: Medium
Interest rate sensitivity on the $30 billion debt load. While 75% is fixed, the remaining 25% is floating, and any spike in SOFR would direc...
Concern: Medium
The Stewardship Verdict is Status Quo: Michael Lisman is successfully executing the Howley model of aggressive M&A and debt-funded returns....
Recent Activity
2026-02-03SEC Filing (8-K)
-9.31%TransDigm reports strong Q1 FY2026 results with 14% revenue growth and raises full-year guidance
2025-10-15Analyst Target
-5.70%Firm: Morgan Stanley Analyst: Kristine Liwag Price Target: $1,600.00 Price When Posted: $1,306.32 Implied Upside: +22.5%
2025-08-05SEC Filing (8-K)
-11.94%TransDigm reports Q3 FY2025 results with 9% revenue growth, raises EBITDA and EPS guidance
2025-05-06SEC Filing (8-K)
-5.48%TransDigm reports Q2 FY2025 results with 12% revenue growth, reaffirms full-year guidance
2023-11-09SEC Filing (8-K)
+8.70%TransDigm announces $1.385 billion acquisition of CPI's Electron Device Business
Valuation Table
9.8/10Decision Grade
Scenario Range
$909
Bear
$1311
Base
$1629
Bull
$1321