-- CFRA, an independent research provider, has providedwith the following research alert. Analysts at CFRA have summarized their opinion as follows:
We lower our 12-month target by $9 to $1,061, or 26.2x our FY 27 (Sep.) EPS estimate, below TDG's three-year average forward P/E of 33.7x. We increase our FY 26 EPS by $1.28 to $39.48 and maintain FY 27's at $40.49. Despite strong Q2 results (18% revenue growth, raised FY 26 guidance), we see multiple headwinds. Recent acquisitions totaling $3.2B are margin dilutive; we forecast EBITDA margins down 150 bps in FY 26. Net debt/EBITDA of ~5.9x following acquisitions amplifies refinancing risk beyond FY 27, while elevated interest expense constrains EPS growth. Middle East conflict adds commercial aftermarket uncertainty for 2H 2026, with potential lag effects on flight activity and parts demand. Given our outlook for decelerating growth, we anticipate the earnings multiple will continue to contract after the forward P/E declined from 34.6x at end-2025 to ~28.5x. TransDigm's reliance on sole-source, high-margin defense products makes it particularly exposed to potential DoD procurement reforms targeting pricing.