Friday, January 14, 2011

TransDigm (NYSE:TDG) EPS Growth Rate Boosted on McKechnie, Recovering Aerospace OEM

Soleil raised their EPS estimates on TransDigm (NYSE:TDG) for the next three to five years, citing the acquisition of McKechnie and the recovery of aerospace OEM.

Soleil says, "We are raising our estimates to $3.92 for FY11 (from $3.83 previously) and $4.64 for FY12 (from $4.36), and our three-to-five year EPS growth rate to 16% (from 14%) due to potential from the purchase of McKechnie and a recovering aerospace OEM and aftermarket...With an over 90% proprietary product mix and around 80% from sole source sales, we believe TransDigm benefits from a significant barrier to entry...High margin aftermarket sales (55% of the total and 85% of EBITDA), are now rebounding due to improving airline traffic."

Soleil Securities reiterates a "Buy" on TransDigm, which closed Thursday at $76.44, down $0.16, or 0.21 percent. Soleil raised their price target on TransDigm from $80 to $96.

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