What Happened?
Shares of aerospace and defense company TransDigm (NYSE: TDG) jumped 2.4% in the afternoon session after the company reported strong fourth-quarter fiscal 2025 results that surpassed analyst expectations for both revenue and profit.
The aerospace and defense company announced that sales grew 11.5% from the previous year to $2.44 billion, beating forecasts. Adjusted earnings came in at $10.82 per share, which was also ahead of Wall Street estimates. The strong performance was driven by what one analyst firm called "business-as-usual," noting strong organic growth and margins. In response to the robust report, BMO Capital reaffirmed its 'Outperform' rating and raised its price target on the stock to $1,500 from $1,420.
After the initial pop the shares cooled down to $1,327, up 1.3% from previous close.
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What Is The Market Telling Us
TransDigm’s shares are not very volatile and have only had 7 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful, although it might not be something that would fundamentally change its perception of the business.
The previous big move we wrote about was 29 days ago when the stock dropped 4.4% on the news that Morgan Stanley lowered its price target on the aircraft component maker to $1,600 from $1,750, citing higher debt. The bank adjusted its fiscal year 2025 earnings per share forecast for TransDigm downward due to increased interest expenses. This revision came after the company undertook recent debt transactions and paid out a special dividend of $90 per share. Despite the lower price target, Morgan Stanley maintained its "Overweight" rating on the stock. The new target still suggested a potential 21.9% upside from the stock's last closing price.
TransDigm is up 5.8% since the beginning of the year, but at $1,327 per share, it is still trading 18.1% below its 52-week high of $1,621 from July 2025. Investors who bought $1,000 worth of TransDigm’s shares 5 years ago would now be looking at an investment worth $2,341.
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