TDG Call Buyers Dig In as JP Morgan Cuts Target

TransDigm Group has entered a week where analysts are trimming targets, shorts are still adding, and options traders are doubling down on the bullish side. The gap between those views has widened further since the last note on September 16.

Analysts Cool, But the Street Stays Cautious-to-Neutral

JP Morgan's Seth Seifman cut his price target to $1,415 from $1,450 on September 17. He kept a Neutral rating. RBC Capital reiterated Sector Perform at $1,350 the day before. Guggenheim initiated with a Neutral on September 15. Three actions in three days — all cautious. The consensus target sits at $1,513, implying roughly 36% upside from the current $1,110 close. That gap exists because the stock has fallen hard: down 7.6% over the past month and off sharply year-to-date.

The bear case is concrete. FY2026 EBITDA guidance was trimmed below expectations. The Simmonds acquisition is diluting margins. EBITDA margin is tracking about 140 basis points lower year-on-year.

Options Market Pushes Back

None of that is stopping call buyers. The put/call ratio hit 0.60 on September 21 — the lowest in 52 weeks. The 20-day average PCR is 1.05. That puts the current reading 2.2 standard deviations below the mean. This follows a PCR of 0.58 on September 18, also near the floor.

The previous note flagged a PCR of 0.85 as extreme. The signal has intensified since. Through August and into early September, the PCR ran between 1.20 and 1.64. The shift over the past week is one of the sharpest rotations in the 52-week dataset.

Shorts Add, but the Borrow Market Is Wide Open

Short interest climbed 15.5% over the past month to 1.69% of free float — still low in absolute terms. The pace matters more than the level. Cost to borrow rose 83% week-on-week to 0.49%, but remains inexpensive. Availability stands at over 6,000% — roughly 60 shares available to borrow for every one already lent out. The lending market is loose. Bears are rebuilding but face no friction doing so.

Data Summary

• Price: $1,109.65 — down 7.6% past month, flat past week
• PCR: 0.60, 52-week low; 20-day mean 1.05; z-score –2.2
• Short interest: 1.69% of free float, +15.5% month-on-month
• Cost to borrow: 0.49%, up 83% week-on-week
• Availability: ~6,069% — ample borrow supply
• JP Morgan target: $1,415 (from $1,450); Neutral maintained
• Consensus target: $1,513; next earnings November 10

What to watch: Whether the call-buying cluster proves prescient ahead of the November 10 earnings, or whether the analyst caution and short rebuilding reflect deteriorating fundamentals that the options market has yet to price in.