TD Cowen has raised its price target for Astronics Corporation (NASDAQ:ATRO) to $90 from $85 and maintained a Buy rating on the aerospace supplier's shares. At the time of the update the stock was trading at $79.39, implying a market capitalization of $2.82 billion. The shares have advanced roughly 298% over the last 12 months.
In its note, TD Cowen pointed to multiple potential upside drivers for Astronics' 2026 outlook. The firm highlighted the prospect of higher Boeing 737 Max production rates, the possibility of tariff relief, scope for further operating leverage and opportunities to capture additional pricing. TD Cowen also calculated that the new price target equates to about 19.2 times 2026 enterprise value to EBITDA.
The analyst house described management's 2026 sales guidance of $950 million to $990 million and an incremental margin range of 40% to 50% as appearing conservative. TD Cowen noted that Astronics' guidance assumes Boeing's rate increases will materialize three to five months later than the firm expects. If Boeing attains its plan to raise 737 Max production to a rate of 47 this summer, TD Cowen said that outcome would likely increase operating leverage for Astronics and meaningfully benefit margins.
TD Cowen also drew attention to the guidance's inclusion of a $20 million tariff drag for 2026, an increase of $12 million compared with the prior year. The firm suggested that figure may prove too high in light of a recent Supreme Court ruling, implying tariff headwinds could be smaller than management assumes.
On pricing, TD Cowen estimated that Astronics still has another 20% to 30% of pricing actions available and noted the company has achieved price increases of 60% on contract renewals. Those actions, combined with production-related operating leverage, form the basis for the firms more constructive view on 2026 results.
Separately, InvestingPro data referenced in the analysis showed three analysts have recently raised their earnings estimates for Astronics for the upcoming period, reflecting growing confidence among some sell-side models. However, InvestingPro's valuation work indicates the stock currently trades above its Fair Value estimate and sits at relatively high EBITDA and Price/Book multiples.
Operationally, Astronics expects a contract to finalize non-recurring engineering work on the MV-75 program and has the potential for NATO orders for military radio test sets, possibly in the first half of the year. The company reported a fourth-quarter EBITDA margin of 19.0%, attributed to a favorable product mix, including a surge in spares that the firm said should also bolster first-quarter margins.
For near-term revenue pacing, Astronics guided first-quarter sales of $220 million to $230 million and projected second through fourth quarter sales at approximately $245 million, $250 million and $250 million, respectively.
Other broker activity noted in the research update included Craig-Hallum raising its price target on Astronics to $80 from $68 while keeping a Buy rating. This move followed a positive pre-announcement from Astronics and expectations for improved performance in fiscal 2026, with fourth-quarter revenue growth reaccelerating to 14% at the midpoint after two quarters of low-single-digit growth.
The note also referenced an earlier TD Cowen action in which the firm initiated coverage of Astronics with a Buy rating and a $65 price target, highlighting the company's position in aircraft in-seat power systems and projecting earnings per share growth of 30% in 2026 and 10% in 2027, alongside more than 7% sales growth.
Analysis
TD Cowen's upgrade centers on a combination of a potentially faster-than-assumed ramp at Boeing for the 737 Max, room for tariff-related upside, and measurable pricing power on contract renewals. The firm views management's own guidance as conservative on both top-line and incremental margins, which frames the $90 target as reflecting a scenario where production and pricing catalysts materialize.