UPDATE: Bank of America Raises PT on TransDigm Group Following Model Update
In a report published Thursday, Bank of America analyst Ronald J. Epstein reiterated a Neutral rating on TransDigm Group (NYSE: TDG), and raised the price target from $142.00 to $154.00.
In the report, Bank of America noted, “We are updating our TDG model post 3Q13 for FY13 and the outyears. In FY13 we now assume a higher interest expense ($272mn vs. $250mn prior), a slightly lower tax rate of 33% (vs. 33.5% prior), revenues of $1.918bn (vs. $1.882 prior), and operating margins of 39% (vs. 39.6% prior). As a result of these puts and takes we are increasing our FY13 Adjusted EPS estimate to $6.91 from $6.67. In the outyears we assume the same growth rate for revenues and assume operating margins continue to expand. We now assume a slightly higher interest expense, but with the presumption that management pays down a portion of debt every year. As a result we are raising our FY14 estimate to $7 from $6.95, FY15 to $7.60 from $7.45, FY16 to $8.15 from $7.90 and FY17 to $8.75 from $8.40.”
TransDigm Group closed on Wednesday at $143.03.
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