TAT Technologies (TATT) Stock Forecast & Price Target

TAT Technologies Ltd is experiencing a robust financial outlook, highlighted by a record backlog of $439 million in the first quarter of 2025, driven by new order flow of $52 million, which reflects an 11% increase sequentially. The company's gross margins have significantly improved from 12% in FY20 to an estimated 25% in FY25, supported by increased production efficiency and economies of scale, with expectations of continued annual expansions in the coming years. Additionally, the strong growth in key product areas, such as Auxiliary Power Units (APUs) and landing gear services, underscores TAT's strategic focus on the aviation MRO sector, positioning the company well for sustained revenue growth and operational success.

TAT Technologies Ltd reported a modest increase in Heat Exchanger revenues to $17.5 million, although this was accompanied by a significant 25% decline in Trading/Leasing revenues, indicating vulnerabilities in revenue generation. The company faces potential headwinds from the possibility of accelerated aircraft retirements or decreased fleet utilization, both of which could negatively impact growth prospects, particularly in its core segments. Despite a strong backlog with Long-Term Agreements valued at $520 million, a sequential decline and concerns over global air traffic present downside risks that contribute to a negative outlook on the stock's performance.