TDY — Fundamental Summary
Conviction 4TDY -- Fundamental Summary
Date: 2026-03-08 Company: Teledyne Technologies Incorporated Sector: Aerospace & Defense / Technology Mkt Cap: ~$26.7B | Price: $654.86
Overall Score: 70.2/100 | Verdict: GO
Red Flags (1 HIGH found)
- HIGH -- Valuation ~30-50% premium to peer median on fwd P/E [Valuation]: TDY has always commanded a technology premium; magnitude elevated post-Iran conflict rally
- MEDIUM -- No insider buying; Director open-market sale post-earnings [Ownership]
- MEDIUM -- Stock within 6% of 52-week high after +56% rally from lows [Valuation]
- MEDIUM -- FY2026 initial guidance implies revenue slowdown (4.2%) [Earnings]: conservative guidance typical
- MEDIUM -- Government revenue (~25%) exposed to DOGE / CR budget risk [Catalysts]
Score Breakdown
| Component | Score | Trend | Summary |
|---|---|---|---|
| Earnings & Financial Health | 82/100 | Up | Record margins, consistent beats, FCF >$1B |
| Valuation | 48/100 | Down | Premium to all peers; near 52-wk high |
| Balance Sheet & Capital | 72/100 | Flat | Net debt 1.52x EBITDA; strong FCF coverage |
| Peer Relative Strength | 72/100 | Up | Best margins in peer group; tied for top growth |
| Catalyst Outlook | 85/100 | Strong | Active conflict demand pull + Q1 earnings |
| Ownership & Flow | 58/100 | Flat | High institutional ownership; no insider buying |
Peer Context
| Metric | TDY | LMT | NOC | RTX | HII | LDOS |
|---|---|---|---|---|---|---|
| Fwd P/E | ~27x | ~17x | ~20x | ~19x | ~14x | ~16x |
| Op Margin | 22.6% | 10.2% | 11.8% | 11.0% | 6.5% | 7.8% |
| Iran demand fit | #1 | #3 | #1 | #2 | #5 | #4 |
Strongest peer (margin): TDY (22.6% non-GAAP op margin). Cheapest peer: LMT (~17x fwd P/E vs. TDY ~27x). Best Iran-conflict demand fit: TDY (sensors, ISR, unmanned) tied #1 with NOC.
Key Catalysts (next 90 days)
| Date | Catalyst | Impact |
|---|---|---|
| Mar 10 | Oceanology International (RESON 50th, new products) | Moderate positive |
| Q1-Q2 | Teledyne / M Subs MOU -- UK Royal Navy demos | Moderate if contracts |
| ~Apr 25 | Q1 2026 Earnings (guidance: $5.40-5.50 EPS) | High impact (beat likely) |
| Ongoing | Iran conflict demand pull -- Black Hornet, GAVIA, ISR | Active tailwind now |
| Apr 2026 | Federal defense budget / CR resolution | High uncertainty (sector) |
Thesis
Bull: Defense spending super-cycle + Iran conflict demand pull re-rates TDY's sensors and unmanned systems to a sustained higher multiple; continued beats drive $780+ target.
Bear: Conflict de-escalation + CR budget freeze collapse the geopolitical premium; at 27x forward P/E there is no cushion for a miss; stock re-rates to $480-520.
Base: TDY consolidates $620-700, sets up a squeeze entry, then grinds to $720-750 on continued execution + incremental defense contract wins over 6 months.
Macro / Sector Context
Tailwinds: Defense spending super-cycle (potential $1.5T US budget); NATO escalation; Iran conflict ISR/unmanned demand; low interest rates reducing debt cost.
Headwinds: Oil at $117 inflationary for commercial industrial segment customers; DOGE cuts threatening non-defense government spend; continuing resolution delaying new starts; USD strength could pressure international instrumentation revenue.
GPR status: Elevated -- geopolitical tailwind is in early phase (days 3-5 of ~20-day empirical outperformance window per quant research).
Data quality: HIGH for a large-cap with widely-covered Q4 results. All financial data sourced via WebSearch (Yahoo Finance, Nasdaq, SEC EDGAR via stocktitan.net, Teledyne Q4 2025 earnings release). Deep dives: analysis/fundamentals/TDY-*.md