TransDigm stock falls on FY2027 EPS outlook

Aircraft turbine blades in a factory as aerospace supplier TDG stock falls on FY2027 EPS outlook

Key Points

01TransDigm’s Q4 adjusted EPS reached $12.44 on $2.99 billion revenue
02Fiscal 2027 adjusted EPS is guided to $47.09–$47.94, below consensus
03Fiscal 2027 revenue outlook of $11.95–$12.15 billion is above estimates
04Shares declined in premarket trading after the earnings guidance

Guidance miss drives share price decline

TransDigm Group shares declined in premarket trading on Tuesday after the company’s fiscal 2027 earnings guidance came in below Wall Street expectations. The aerospace components manufacturer forecast adjusted earnings per share of $47.09 to $47.94 for fiscal 2027, with a midpoint of $47.52, compared with an analyst consensus of $48.66. The profit outlook and its shortfall to expectations overshadowed stronger-than-expected results for the most recent quarter and a solid revenue outlook for the upcoming fiscal year.

Shares fell 1.4% in pre-market trading immediately following the release of the guidance, indicating a negative initial share-price reaction.

Fourth quarter beats on revenue and earnings

For the fourth quarter ended September 30, 2026, TransDigm posted adjusted earnings per share of $12.44, surpassing the analyst consensus of $12.22. Revenue reached $2.99 billion, above the $2.95 billion estimate and 23% higher than the $2.44 billion recorded in the same quarter a year earlier.

The company reported EBITDA As Defined of $1.58 billion for the quarter, compared with $1.32 billion in the prior-year period. Management stated that the fourth quarter results exceeded the high end of its most recent guidance for both revenue and EBITDA As Defined, emphasizing what it described as strong performance for the quarter and full fiscal year.

Fiscal 2027 outlook and growth expectations

Alongside the quarterly results, TransDigm issued detailed guidance for the fiscal year ending September 30, 2027. Adjusted EPS is projected in a range of $47.09 to $47.94, which implies growth from the prior year but remains below the $48.66 analyst consensus.

TransDigm expects fiscal 2027 revenue between $11.95 billion and $12.15 billion, with a midpoint of $12.05 billion that exceeds the consensus estimate of $11.75 billion. EBITDA As Defined is forecast at $6.20 billion to $6.35 billion, representing an increase of about 13% at the midpoint compared with the prior fiscal year.

Capital deployment and market drivers

During fiscal 2026, TransDigm deployed over $7 billion in capital, including approximately $4.4 billion in acquisitions and a record $2.8 billion in share repurchases. Management indicated that the full-year EBITDA As Defined margin was 52.7%, which includes about two percentage points of dilution related to recent acquisitions.

The company also outlined expectations for demand across its key markets heading into fiscal 2027. It anticipates high-single-digit to low-double-digit growth in commercial aircraft original-equipment revenue and high-single-digit growth in both commercial aftermarket and defense revenue. These demand trends underpin the revenue and EBITDA growth embedded in the new guidance, even as the earnings-per-share outlook trails market forecasts.

Key Takeaways

01TransDigm’s share reaction illustrates how earnings-per-share guidance relative to consensus can outweigh a quarterly beat and strong revenue outlook.
02The company is planning for continued top-line and EBITDA growth in fiscal 2027, supported by expected expansion across commercial and defense markets.
03Heavy capital deployment into acquisitions and share repurchases, along with a high EBITDA margin, frames TransDigm’s strategy as it enters the new fiscal year.

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