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Wedbush Downgrades TransDigm (TDG) to Neutral; Acquisitions Will Provide Upside, but Fundamental Upside Should Be Limited

January 18, 2012 7:25 AM EST Send to a Friend
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Price: $184.92 +0.75%

Rating Summary:
    10 Buy, 8 Hold, 0 Sell

Rating Trend: Up Up

Today's Overall Ratings:
    Up: 10 | Down: 9 | New: 11
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Wedbush downgraded TransDigm (NYSE: TDG) from Outperform to Neutral with a price target lowered from $108 to $98.

Wedbush analyst said, "Based on our proprietary commercial Maintenance, Repair and Overhaul (MRO) survey, we believe 1Q 12 results will be basically in-line, and upside from better than expected fundamentals in 2012 will be limited...We have lowered our FY 2012 EPS estimate to $5.53 from $5.63."

"Our revised 2012 estimates are still largely ahead of the company’s guidance, but we do not believe that an in-line 1Q 2012 or full-year 2012 will provide a catalyst for the stock. We believe that including Harco, acquisitions will add approximately $180 million in revenues to 2012. Note that Harco will add $40 mil in revs and is not in the current guidance. However, we believe that multiples for acquisition targets in the commercial aerospace sector will remain inflated, warranting caution."

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 $97.97 yesterday.




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