TDG - Embedded Expectations Analysis - 2020 01 17
TransDigm Group Incorporated (TDG:USA) currently trades at historical highs relative to UAFRS-based (Uniform) Earnings, with a 26.3x Uniform P/E. Even at these levels, the market has bearish expectations for the firm, and management appears concerned about their Esterline integration, liquidity, and demandSpecifically, management may be exaggerating the progress of their Esterline integration and their ability to sustain new business growth in Esterline's aftermarket business. In addition, they may be concerned about their liquidity and leverage positioning following their recent debt refinancing, and they may be downplaying concerns about their order book and free cash flow. Moreover, management may be overstating the demand among industrial customers for new equipment functionalities and capabilities, and they appear concerned about global passenger revenue trends
TransDigm Group is a holding company. Through its subsidiaries, the company designs, produces and supplies aircraft components for use on commercial and military aircraft. The company's segments are: Power and Control, which develops, produces and markets systems and components that provide power to or control power of the aircraft utilizing electronic, fluid, power and mechanical motion control technologies; Airframe, which develops, produces and markets systems and components that are used in non-power airframe applications utilizing airframe and cabin structure technologies; and Non-aviation, which develops, produces and markets products for non-aviation markets.
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