Bank of America Securities analyst Ronald Epstein maintained a Buy rating on Transdigm Group (TDG – Research Report) yesterday and set a price target of $1,615.00.
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Ronald Epstein has given his Buy rating due to a combination of factors including TransDigm Group’s strategic acquisition activities and its potential for future revenue growth. The recent agreement to acquire Simmonds Precision Products from Goodrich Corp. is a significant move, expected to generate approximately $350 million in revenue by 2025, with a substantial portion coming from proprietary products and the aftermarket sector. This aligns with TransDigm’s strategy of expanding its presence in both commercial aerospace and defense markets.
Furthermore, Epstein notes that TransDigm’s continued activity in mergers and acquisitions, as evidenced by the recent acquisition of Servotronics, supports the company’s growth trajectory. The acquisition strategy is seen as a positive step, allowing TransDigm to enhance its pricing power in the aftermarket segment, which is crucial given the competitive industry dynamics. The analyst maintains a positive outlook on TransDigm’s ability to leverage these acquisitions for sustained financial performance, justifying the Buy rating.
In another report released on June 23, Stifel Nicolaus also initiated coverage with a Buy rating on the stock with a $1,710.00 price target.