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Research Alert: CFRA Keeps Hold Opinion On Shares Of Transdigm Group Incorporated

05/11/2021 11:54

03:50 PM EDT, 05/11/2021 (MT Newswires) -- CFRA, an independent research provider, has provided MT Newswires with the following research alert. Analysts at CFRA have summarized their opinion as follows:

We keep our target at $584, 39x our FY 22 (Sep.) EPS estimate (lowered to $15.15 from $15.76; 2021 to $9.89 from $10.17) -- higher than TDG's 5-year forward P/E average of 28x as we see normalized, post-pandemic earnings materially above 2021-2022 levels. Mar-Q adjusted EPS of $2.58 (-58% Y/Y) beat consensus by $0.04. Mar-Q revenue fell 17% Y/Y, with strong growth at defense (historically 37% of sales, +8% Y/Y) more than offset by poor commercial results. Commercial OEM (28%, -43% Y/Y) was the worst performer in the Q, driven by still low production rates at the major airframers. Next worst was Commercial Aftermarket (32%, -39% Y/Y), as lower fleet utilization by airlines causes fewer orders of replacement parts. There were signs the commercial aviation recovery is gaining steam though, as Mar-Q part orders were up 20%-plus vs. Dec-Q for both OEM and Aftermarket. We see TDG revenue recovering to above pre-pandemic levels in the second half of calendar 2022, and calculate shares are currently near fair value.