Transdigm Group (NYSE:TDG) Shares Gap Down on Disappointing Earnings

Key Points

• Transdigm Group shares experienced a significant decline, opening at $1,455.00 after closing at $1,608.98, due to disappointing earnings that fell short of analyst expectations.
• The company reported $9.60 earnings per share for the quarter, missing the consensus estimate of $9.75, and revenue of $2.24 billion was below the expected $2.29 billion.
• Despite the earnings miss, Transdigm Group maintains a consensus rating of "Moderate Buy" with various analysts upgrading their price targets, indicating potential future growth.

Transdigm Group Incorporated (NYSE:TDG - Get Free Report) gapped down before the market opened on Tuesday following a dissappointing earnings announcement. The stock had previously closed at $1,608.98, but opened at $1,455.00. Transdigm Group shares last traded at $1,437.60, with a volume of 161,988 shares changing hands.

The aerospace company reported $9.60 earnings per share (EPS) for the quarter, missing the consensus estimate of $9.75 by ($0.15). The company had revenue of $2.24 billion for the quarter, compared to analysts' expectations of $2.29 billion. Transdigm Group had a net margin of 21.09% and a negative return on equity of 38.71%. The business's revenue for the quarter was up 9.3% on a year-over-year basis. During the same period in the previous year, the business earned $9.00 earnings per share.

Analyst Upgrades and Downgrades

Several research firms have recently weighed in on TDG. Northcoast Research raised shares of Transdigm Group from a "neutral" rating to a "buy" rating and set a $1,500.00 price target on the stock in a research note on Wednesday, April 9th. KeyCorp raised their price target on shares of Transdigm Group from $1,500.00 to $1,700.00 and gave the stock an "overweight" rating in a research note on Wednesday, July 2nd. Stifel Nicolaus began coverage on shares of Transdigm Group in a research note on Tuesday, June 24th. They issued a "buy" rating and a $1,710.00 price target on the stock. Truist Financial raised their price target on shares of Transdigm Group from $1,553.00 to $1,730.00 and gave the stock a "buy" rating in a research note on Friday, July 11th. Finally, The Goldman Sachs Group raised their price target on shares of Transdigm Group from $1,526.00 to $1,709.00 and gave the stock a "buy" rating in a research note on Monday, June 23rd. Four analysts have rated the stock with a hold rating and twelve have given a buy rating to the company's stock. According to data from MarketBeat, Transdigm Group currently has a consensus rating of "Moderate Buy" and an average target price of $1,606.47.

Insider Buying and Selling at Transdigm Group

In other Transdigm Group news, Director Sean P. Hennessy sold 4,700 shares of Transdigm Group stock in a transaction dated Tuesday, May 20th. The shares were sold at an average price of $1,436.52, for a total transaction of $6,751,644.00. Following the completion of the sale, the director directly owned 33,713 shares in the company, valued at $48,429,398.76. This trade represents a 12.24% decrease in their ownership of the stock. The sale was disclosed in a legal filing with the Securities & Exchange Commission, which is available at the SEC website. Also, COO Joel Reiss sold 3,000 shares of Transdigm Group stock in a transaction dated Monday, July 21st. The shares were sold at an average price of $1,597.86, for a total transaction of $4,793,580.00. Following the sale, the chief operating officer owned 3,600 shares of the company's stock, valued at approximately $5,752,296. This represents a 45.45% decrease in their ownership of the stock. The disclosure for this sale can be found here. Over the last quarter, insiders sold 69,872 shares of company stock valued at $100,747,061. 4.09% of the stock is currently owned by company insiders.

Institutional Investors Weigh In On Transdigm Group

A number of institutional investors have recently made changes to their positions in the stock. Vanguard Group Inc. increased its position in shares of Transdigm Group by 1.4% during the first quarter. Vanguard Group Inc. now owns 6,359,924 shares of the aerospace company's stock valued at $8,797,619,000 after acquiring an additional 89,121 shares during the last quarter. Capital World Investors grew its holdings in shares of Transdigm Group by 4.3% in the fourth quarter. Capital World Investors now owns 3,791,927 shares of the aerospace company's stock valued at $4,805,434,000 after purchasing an additional 155,541 shares in the last quarter. Capital Research Global Investors grew its holdings in shares of Transdigm Group by 4.8% in the fourth quarter. Capital Research Global Investors now owns 1,911,128 shares of the aerospace company's stock valued at $2,421,979,000 after purchasing an additional 87,309 shares in the last quarter. GAMMA Investing LLC grew its holdings in shares of Transdigm Group by 177,412.3% in the first quarter. GAMMA Investing LLC now owns 1,240,811 shares of the aerospace company's stock valued at $1,716,401,000 after purchasing an additional 1,240,112 shares in the last quarter. Finally, Windacre Partnership LLC grew its holdings in shares of Transdigm Group by 3.6% in the fourth quarter. Windacre Partnership LLC now owns 753,997 shares of the aerospace company's stock valued at $955,525,000 after purchasing an additional 25,997 shares in the last quarter. 95.78% of the stock is currently owned by institutional investors and hedge funds.

Transdigm Group Stock Down 11.5%

The stock has a market cap of $79.97 billion, a price-to-earnings ratio of 48.36, a PEG ratio of 3.20 and a beta of 1.07. The business's fifty day moving average is $1,511.56 and its two-hundred day moving average is $1,409.78.

Transdigm Group Company Profile

TransDigm Group Incorporated designs, produces, and supplies aircraft components in the United States and internationally. The Power & Control segment offers mechanical/electro-mechanical actuators and controls, ignition systems and engine technology, specialized pumps and valves, power conditioning devices, specialized AC/DC electric motors and generators, batteries and chargers, databus and power controls, sensor products, switches and relay panels, hoists, winches and lifting devices, and cargo loading and handling systems.

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