Investing.com - Stifel initiated coverage on TransDigm Group (NYSE: TDG ) with a Buy rating on Monday, setting a price target of $1,710.00 for the aerospace components manufacturer.

The research firm cited "continued solid operations and sustained momentum" across TransDigm’s portfolio as key factors supporting its positive outlook on the company, which specializes in proprietary aerospace parts.

Stifel’s price target represents a significant premium to TransDigm’s current trading price and is based on applying a multiple of approximately 22 times the firm’s estimate of the company’s fiscal year 2027 EBITDA, discounted back one year.

The 22x multiple exceeds TransDigm’s pre-COVID trading levels but aligns with the company’s valuation over the past four years, according to Stifel’s analysis.

The research firm identified several potential downside risks to its investment thesis, including a potential downturn in the commercial aerospace cycle, operational challenges, difficulties in sourcing and integrating acquisitions, and the possibility of an unexpected significant increase in interest rates.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.