TransDigm Group Incorporated (NYSE:TDG) last week reported its latest annual results, which makes it a good time for investors to dive in and see if the business is performing in line with expectations. Results were roughly in line with estimates, with revenues of US$11b and statutory earnings per share of US$35.51. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there’s been a strong change in the company’s prospects, or if it’s business as usual. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.
Taking into account the latest results, the most recent consensus for TransDigm Group from 18 analysts is for revenues of US$12.0b in 2027. If met, it would imply a decent 14% increase on its revenue over the past 12 months. Statutory earnings per share are predicted to grow 16% to US$43.35. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$11.8b and earnings per share (EPS) of US$44.80 in 2027. So it’s pretty clear consensus is mixed on TransDigm Group after the latest results; whilethe analysts lifted revenue numbers, they also administered a minor downgrade to per-share earnings expectations.
Check out our latest analysis for TransDigm Group
There’s been no major changes to the price target of US$1,426, suggesting that the impact of higher forecast revenue and lower earnings won’t result in a meaningful change to the business’ valuation. The consensus price target is just an average of individual analyst targets, so – it could be handy to see how wide the range of underlying estimates is. The most optimistic TransDigm Group analyst has a price target of US$1,754 per share, while the most pessimistic values it at US$1,100. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await TransDigm Group shareholders.
Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. The period to the end of 2027 brings more of the same, according to the analysts, with revenue forecast to display 14% growth on an annualised basis. That is in line with its 16% annual growth over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenues grow 9.3% per year. So it’s pretty clear that TransDigm Group is forecast to grow substantially faster than its industry.
The Bottom Line
The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. Happily, they also upgraded their revenue estimates, and are forecasting them to grow faster than the wider industry. The consensus price target held steady at US$1,426, 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. At Simply Wall St, we have a full range of analyst estimates for TransDigm Group going out to 2029, and you can see them free on our platform here..
And what about risks? Every company has them, and we’ve spotted 2 warning signs for TransDigm Group you should know about.
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