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Reasons to Add TransDigm Group (TDG) to Your Portfolio Now
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TransDigm Group Incorporated (TDG - Free Report) is a producer and supplier of highly engineered aerospace components used in commercial and military aircraft. Recovering commercial air traffic and a strong U.S. defense budget will continue to boost the prospects of TDG.
Let’s focus on the factors that make this Zacks Rank #1 (Strong Buy) stock a strong investment pick at the moment.
Growth Projections
The Zacks Consensus Estimate for TDG’s fiscal 2023 earnings per share is pegged at $24.03. The bottom-line estimates have moved up 7.5% in the past 60 days.
The Zacks Consensus Estimate for the company’s current year sales stands at $6.49 billion, indicating year-over-year growth of 19.5%.
Debt and Liquidity
As of Apr 1, 2023, TransDigm Group’s cash equivalents were $3,418 million and its current debt was $1,162 million.. Therefore, it can be safely concluded that the company holds a strong solvency position, at least in the near term.
TransDigm Group’s current ratio of 2.96 is much better than the Zacks S&P 500 Composite’s average of 1.24. This implies that the company has sufficient financial capability to pay its short-term debt obligations.
Improving Air Traffic
TransDigm’s commercial aftermarket revenues witnessed a 38% year-over-year improvement in the fiscal second quarter. This improvement can be attributed to the continued recovery in commercial air travel demand and the resulting higher flight hours. The International Air Transport Association stated in its latest economic outlook that, based on the current recovery momentum, it expects total global revenue passenger kilometers (RPKs) to increase by around 20% in 2023. This should bode well for TransDigm’s growth.
Surprise History & Long-term EPS Growth
TransDigm’s long-term (three- to five-year) earnings growth is currently pegged at 25.08%.
TDG reported an average positive earnings surprise of 8.97% in the last four reported quarters.
Price Performance
In the past six months, TDG’s shares have increased by 38.1% compared with the industry’s average growth of 7%.
The Zacks Consensus Estimate for AVAV’s 2023 earnings per share is pegged at $2.79. Its bottom-line estimates have moved up 13% in the past 60 days.
The Zacks Consensus Estimate for VTSI’s 2023 EPS is pegged at 45 cents, implying a year-over-year improvement of 150%. The Zacks Consensus Estimate for 2023 sales indicates year-over-year growth of 16.1%.
The Zacks Consensus Estimate for CW’s 2023 EPS is pegged at $8.82, implying a year-over-year improvement of 8.5%. It delivered an average earnings surprise of 4% in the past four quarters.
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Reasons to Add TransDigm Group (TDG) to Your Portfolio Now
TransDigm Group Incorporated (TDG - Free Report) is a producer and supplier of highly engineered aerospace components used in commercial and military aircraft. Recovering commercial air traffic and a strong U.S. defense budget will continue to boost the prospects of TDG.
Let’s focus on the factors that make this Zacks Rank #1 (Strong Buy) stock a strong investment pick at the moment.
Growth Projections
The Zacks Consensus Estimate for TDG’s fiscal 2023 earnings per share is pegged at $24.03. The bottom-line estimates have moved up 7.5% in the past 60 days.
The Zacks Consensus Estimate for the company’s current year sales stands at $6.49 billion, indicating year-over-year growth of 19.5%.
Debt and Liquidity
As of Apr 1, 2023, TransDigm Group’s cash equivalents were $3,418 million and its current debt was $1,162 million.. Therefore, it can be safely concluded that the company holds a strong solvency position, at least in the near term.
TransDigm Group’s current ratio of 2.96 is much better than the Zacks S&P 500 Composite’s average of 1.24. This implies that the company has sufficient financial capability to pay its short-term debt obligations.
Improving Air Traffic
TransDigm’s commercial aftermarket revenues witnessed a 38% year-over-year improvement in the fiscal second quarter. This improvement can be attributed to the continued recovery in commercial air travel demand and the resulting higher flight hours. The International Air Transport Association stated in its latest economic outlook that, based on the current recovery momentum, it expects total global revenue passenger kilometers (RPKs) to increase by around 20% in 2023. This should bode well for TransDigm’s growth.
Surprise History & Long-term EPS Growth
TransDigm’s long-term (three- to five-year) earnings growth is currently pegged at 25.08%.
TDG reported an average positive earnings surprise of 8.97% in the last four reported quarters.
Price Performance
In the past six months, TDG’s shares have increased by 38.1% compared with the industry’s average growth of 7%.
Image Source: Zacks Investment Research
Other Stocks to Consider
A few other top-ranked stocks in the same sector are AeroVironment (AVAV - Free Report) , VirTra Inc. (VTSI - Free Report) and CurtissWright Corp.(CW - Free Report) .
While VirTra sports a Zacks Rank #1, CurtissWright and AeroVironment each carry a Zacks Rank #2 (Buy) at present.
You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for AVAV’s 2023 earnings per share is pegged at $2.79. Its bottom-line estimates have moved up 13% in the past 60 days.
The Zacks Consensus Estimate for VTSI’s 2023 EPS is pegged at 45 cents, implying a year-over-year improvement of 150%. The Zacks Consensus Estimate for 2023 sales indicates year-over-year growth of 16.1%.
The Zacks Consensus Estimate for CW’s 2023 EPS is pegged at $8.82, implying a year-over-year improvement of 8.5%. It delivered an average earnings surprise of 4% in the past four quarters.