Goldman Sachs Defense Stocks: Top 12 Stock Picks

8. TransDigm Group Incorporated (NYSE:TDG)

Stake Value as of Q4 2024: $261,791,022

TransDigm Group Incorporated (NYSE:TDG) manufactures engineered aircraft components for commercial and military aircraft. It is one of the top defense picks from the Goldman Sachs stock portfolio.

On February 4, the company reported strong results for Q1 FY25, with net income surging 29% year-over-year to $493 million, while net sales increased 12% from last year to $2,006 million. Adjusted EPS was logged at $7.83, in line with expectations and up 9% from the prior year’s quarter.

Recent strategic acquisitions are positioning the company well for long-term growth, including major increases in future revenue. In June 2024, TransDigm Group Incorporated (NYSE:TDG) acquired Communications & Power Industries’ Electron Device business, which manufactures electronic components and subsystems for the aerospace and defense industry. Later in July, it completed the acquisition of Raptor Scientific, a leading provider of complex text and manufacturing solutions.

TransDigm Group Incorporated (NYSE:TDG) is an important player in the aerospace and defense industry, enjoying significant pricing power. Andvari Associates stated the following regarding the company in its Q1 2025 investor letter:

“TransDigm is a business with extreme pricing power. They make hundreds of different parts that go into commercial and military aircraft. Because TransDigm owns the intellectual property or is the sole source provider of nearly all its products, it can easily raise price increases when there is inflation or when its costs rise.”

Wall Street analysts are bullish on the stock, with a consensus Buy rating and an average share price upside potential of nearly 10%. According to Insider Monkey’s database for Q4 2024, 69 hedge funds held a stake in TransDigm Group Incorporated (NYSE:TDG).