NEW YORK (AP) — Shares of aircraft parts supplier TransDigm Group Inc. were downgraded Monday by an analyst at Wedbush Securities who said the rebound in commercial aftermarket sales won't be as robust as he had thought.
TransDigm, based in Cleveland, has predicted a commercial aftermarket sales increase in the low to mid single digits for fiscal 2010.
Wedbush analyst Kenneth Herbert now believes sales will be up by just the low single digits, compared with a previous forecast of a high single-digit increase.
Herbert thinks TransDigm's commercial aftermarket revenue will turn positive for the first time in several quarters in its fiscal third quarter that ended June 30. But it won't be enough to lift sales much for the year, he said.
He dropped his rating to "Neutral" from "Outperform."
Herbert believes the current recovery in the air travel market will lead the aftermarket parts market to recover. But a big uptick in aftermarket sales might not happen until TransDigm's next fiscal year, he thinks.
Herbert lowered his price target on the stock to $54 from $60. He thinks that new equipment sales will balance earnings slightly for the company, even though it makes most of its money on aftermarket parts.
Company shares slipped 57 cents to $51.68 in premarket trading.