Stifel Downgrades TransDigm (TDG) to Hold

Stifel analyst Jonathan Siegmann downgraded TransDigm (NYSE: TDG) from Buy to Hold with a price target of $1,405.00 (from $1,525.00).

The analyst comments: “TDG's Q3 revenue of $2.74b beat estimates, up 23% year-over-year and 13% organically, with broad-based strength across Commercial OEM (+17%), Commercial Aftermarket (+17%), and Defense (+11%), all supported by bookings ahead of sales. Adj. EBITDA increased 19% to $1.45b also exceeding estimates Management raised FY26 guidance again on the back of an upgrade to all three end-market growth assumptions. Despite the beat, we are downgrading TDG to Hold on the back of lower M&A, growing right-to-repair legislative risk, potential aerospace demand moderation from elevated fuel costs, and rising interest rates all likely continuing to weigh on TDG's valuation.

TDG's Q3 revenues were $2.74b (+23% y/y, +13% organically) ahead of Stifel/Street estimates of $2.66b/2.68b. All three of TDG's key end markets showed strong pro-forma growth lead by Commercial OEM +17% y/y with Commercial Aftermarket up +17% and Defense up +11%. Bookings were ahead of sales across each end market supporting the full year guide.”

For an analyst ratings summary and ratings history on TransDigm click here. For more ratings news on TransDigm click here.

Shares of TransDigm closed at $1275.05 yesterday.

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