TransDigm Group (TDG) F3Q26 First Take aftermarket acceleration, margin beat, doing deals, guidance raised

Equity Research 4 August 2026 | 8:37AM EDT

TransDigm Group (TDG): F3Q26 First Take: aftermarket acceleration, margin beat, doing deals, guidance raised

Bottom Line: TDG reported F3Q26 revenue, EBITDA and EPS ahead of consensus, Noah Poponak, CFA | with an acceleration in the aerospace aftermarket growth rate and a margin beat. Goldman Sachs & Co. LLC The company raised FY2026 guidance, including revenue by 1%, EBITDA by 2%, and Connor Dessert EPS by 4%, with guidance now above consensus across key metrics. | Goldman Sachs & Co. LLC Details: F3Q26 EPS of $10.87 is above FactSet consensus of $10.30. Revenue is up Nizar Mesani 13% organically. Commercial aftermarket is up 17% yoy (up 14% last quarter), | commercial OEM is up 17% (up 12% last quarter) and defense is up 11% (up 11% last Goldman Sachs India SPL quarter). Within that, commercial transport AM/OE are up 18% and up 25% and Amanda Fenenbock, CFA | bizjet/heli AM/OE are up 13%/up 3%. EBITDA as defined of $1.45bn is above Goldman Sachs & Co. LLC consensus at $1.39bn, on a 52.8% margin (consensus at 51.5%). Operating cash flow of $724mn is above consensus at $683mn, and up from $631mn a year ago. TDG Tomas Russo | updated FY26 guidance, including a revenue range of $10.47-$10.55bn Goldman Sachs & Co. LLC ($10.30-$10.42bn prior; vs consensus of $10.38bn), EBITDA as defined of $5.49-$5.55bn ($5.37-$5.47bn prior; vs consensus of $5.41bn), and adjusted EPS of $40.62-$41.46 ($38.83-$40.21 prior; vs consensus of $40.04).

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Goldman Sachs TransDigm Group (TDG)

Exhibit 1: TDG F3Q26 results vs GS estimates $mn, except EPS

YoY change Actual GS Estimate $ Variance % Variance EPS Impact F3Q25 Growth TOTAL REVENUES Commercial Aerospace OEM % % Commercial Aerospace Aftermarket % % Defense Aerospace OEM & Aftermarket 1,095.5 1, % % Total sales 2,741 2,661 79.9 3.0% $0.49 2,237 22.5%

EBITDA as Defined 1,447.0 1, % 0.59 1,217.0 18.9% EBITDA as Defined Margin 52.8% 52.7% 10 bp 54.4% -160 bp

Net Interest expense % % Other (loss)/income, net ) nm EBT % 635.0 12.3% Income tax expense % ( % Effective income tax rate 24.3% 23.0% 130 bp 22.4% 190 bp Net income to common % 492.0 9.6% Reported EPS $9.39 $9.30 $0.09 1.0% $0.11 $8.47 10.9% Diluted Shares % 0.10 58.1 -1.2%

Net Income, adjusted % % Adjusted EPS $10.87 $10.16 $0.71 7.0% $0.60 $9.60 13.2%

Source: Company data, Goldman Sachs Global Investment Research

Exhibit 2: FY26 Guidance FY2026 Outlook November February May August

Organic End Market Growth Commercial OEM up HSD - mid-teens % -- up LDD - mid-teens % Mid-teens % Commercial Aftermarket up HSD % -- up HSD - LDD % Low LDD % Defense up MSD - HSD % -- up HSD % HSD - LDD %

Revenues $9,750 - $9,950 $9,845 - $10,035 $10,300 - $10,420 $10,470 - $10,550

EBITDA As Defined $5,075 - $5,225 $5,140 - $5,280 $5,370- $5,470 $5,490- $5,550 Margin 52.1-52.5% 52.2-52.6% 52.1-52.5% 52.4-52.6%

Net Income $1,906 - $2,026 $1,952 - $2,024 $2,026 - $2,106 $2,102 - $2,150 GAAP EPS $31.55 - $33.59 $32.47 - $34.39 $33.91 - $35.29 $35.38 - $36.21 Adjusted EPS $36.49 - $38.53 $37.42 - $39.34 $38.83 - $40.21 $40.62 - $41.46

Tax Rate ~22% - 24% adj / GAAP -- -- --

Interest expense ~$1,900 -- -- -- Weighted shares outstanding 58.5mn 58.3mn 58.0mn 57.7mn Capex $280 - $310 -- -- --

Source: Company data, Goldman Sachs Global Investment Research

Our 12-month price target of $1,937 is derived from a target CY27E EV/EBITDA of 22.5X. Key risks include (1) ASM growth, (2) acquisition integration, (3) Defense spending.