TransDigm Group

Evidence of pricing power. EBITDA As Defined margins consistently sit in the low to mid‑50s and expanded again in Q3 FY2025 to 54.4% despite mixed OEM demand, reflecting the company’s ability to price for value on critical, sole‑source parts.

Management’s language emphasizes pricing that fairly reflects delivered value and required resources, and the aftermarket/oem mix naturally supports inelastic demand. Latent and sustainability assessment.

Given the mission‑critical nature of the parts and their small cost relative to total aircraft economics, we believe TransDigm could continue to take measured price above inflation over time, especially in aftermarket channels.

Offsets include periodic DoD or political pressure on defense pricing and occasional PMA substitution on specific lines, which we underwrite by dialing back our long‑term price‑mix uplift in defense and certain high‑volume consumables.