TransDigm Upgraded to Strong Buy - Analyst Blog

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On Nov 15, Zacks Investment Research upgraded TransDigm Group Incorporated ( TDG ) to a Zacks Rank #1 (Strong Buy).

Why the Upgrade?

TransDigm Group has been witnessing rising earnings estimates on the back of strong fiscal fourth-quarter 2013 results, an improved fiscal 2014 guidance and positive synergies from acquisitions. Moreover, this well-known designer, producer and supplier of highly engineered aircraft components delivered positive earnings surprises in 3 of the last 4 quarters with an average beat of 42.1%. The long-term expected earnings growth rate for this stock is 14.5%   

TransDigm Group reported fiscal fourth-quarter fiscal 2013 adjusted earnings per share of $1.75, which stormed past the Zacks Consensus Estimate of loss of 18 cents. Net sales in the quarter totaled $539.7 million, representing a year-over-year increase of 16.7%. Organic net sales growth rose 5.6% from the prior-year period, driven by increase in volumes from commercial original equipment manufacturer (OEM) and defense.

TransDigm expects to reap positive synergies from its three recent acquisitions and has provided a positive outlook for fiscal 2014. Adjusted earnings per share in fiscal 2014 are expected to be in the range of $7.00 to $7.32, as compared with fiscal 2013 earnings of $6.90 per share. Net sales are projected to be in the range of $2.1-$2.2 billion in fiscal 2014 compared with revenues of $1.9 billion in fiscal 2013.

The Zacks Consensus Estimate for the first quarter of 2014 has gone up 2.7% to $1.54 per share as most of the estimates were revised higher over the last 7 days. For fiscal 2014, estimate is within the guidance range provided by TransDigm at $7.26, reflecting a 5.4% increase in the Zacks Consensus Estimate.

Alliant Techsystems ( ATK ), Hexcel Corp. ( HXL ) and Teledyne Technologies Inc. ( TDY ) are also worth a look. While Alliant carries a Zacks Rank #1 (Strong Buy), Hexcel and Teledyne Technologies carry a Zacks Rank #2 (Buy).



ALLIANT TECHSYS (ATK): Free Stock Analysis Report

HEXCEL CORP (HXL): Free Stock Analysis Report

TRANSDIGM GROUP (TDG): Free Stock Analysis Report

TELEDYNE TECH (TDY): Free Stock Analysis Report

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Zacks Investment Research



The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



This article appears in: Investing , Business , Stocks

Referenced Stocks: ATK , HXL , TDG , TDY

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