Aerospace and defense company TransDigm (NYSE: TDG) will be announcing earnings results this Tuesday before market hours. Here’s what you need to know.
TransDigm beat analysts’ revenue expectations last quarter, reporting revenues of $2.54 billion, up 18.3% year on year. It was an exceptional quarter for the company, with full-year EBITDA and revenue guidance exceeding analysts’ expectations.
Is TransDigm a buy or sell going into earnings? Read our full analysis here, it’s free for active Edge members.
This quarter, the market is expecting TransDigm’s revenue to grow 19.6% year on year, improving from the 9.3% increase it recorded in the same quarter last year.
Analysts covering the company have generally reconfirmed their estimates over the last 30 days, suggesting they anticipate the business will stay the course heading into earnings. TransDigm has missed Wall Street’s revenue estimates multiple times over the last two years.
Looking at TransDigm’s peers in the aerospace segment, some have already reported their Q2 results, giving us a hint as to what we can expect. AAR delivered year-on-year revenue growth of 26.1%, beating analysts’ expectations by 3.9%, and Hexcel reported revenues up 8%, in line with consensus estimates. AAR traded down 9.8% following the results while Hexcel was also down 2.6%.
Read our full analysis of AAR’s results here and Hexcel’s results here.
In the last year or so, investors have shifted their focus from one macro dynamic to the next (AI disintermediation and AI investment to geopolitical conflict, interest rates, and the health of the wider economy). While some of the aerospace stocks have shown solid performance in this choppy environment, the group has generally underperformed, with share prices down 5% on average over the last month. TransDigm is down 7.3% during the same time and is heading into earnings with an average analyst price target of $1,512 (compared to the current share price of $1,254).
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