Last Update 14 Dec 25

Fair value Decreased 2.51%

ATRO: In Seat Power Leadership Will Drive Substantial Future Share Upside

Astronics updated analyst price target has edged down by about $1.60 to roughly $61, as analysts balance slightly softer long term margin and growth assumptions with continued Buy ratings that highlight the company’s leading in seat power position, robust aerospace demand, and potential for earnings and multiple expansion over the next several years.

Analyst Commentary

Recent Street research remains broadly constructive on Astronics, with multiple initiations and target hikes underscoring confidence in the company’s earnings trajectory and competitive positioning, even as some macro and sector specific risks temper enthusiasm at the margin.

Bullish Takeaways

Bullish analysts highlight Astronics as a market share leader in aircraft in seat power systems, viewing this niche leadership as a durable moat that supports premium valuation multiples over time.
Forecasts for approximately 30 percent earnings growth in 2026 followed by double digit growth in 2027, on more than 7 percent annual sales expansion, underpin the view that the current multiple does not fully reflect the company’s medium term growth algorithm.
Several initiations emphasize that investor awareness remains low relative to the growth and margin profile, suggesting room for multiple expansion as execution on backlog, new contracts, and aftermarket opportunities becomes more visible.
Coverage notes call out volume, penetration, and new contract tailwinds across aerospace and defense, with the potential for double digit revenue growth and over 40 percent incremental margins. This combination is seen as attractive for growth at a reasonable price investors and supportive of the thesis that the stock could significantly outperform, potentially even doubling over the next few years if the plan is executed.

Bearish Takeaways

Bearish analysts, while still generally positive on the shares, caution that sector sentiment is increasingly tied to aircraft OEM production cycles. Any slowdown in build rates could weigh on both revenue growth and investors’ willingness to pay elevated multiples.
There is concern that strong aftermarket demand, currently buoyed by passenger traffic strength and engine shop visits, could moderate if macro conditions soften, pressuring the high incremental margin profile that underpins many bullish valuation cases.
Defense exposure is viewed as more nuanced, with potential government funding disruptions and budget uncertainty creating risk to near term visibility for select programs. This could add volatility to quarterly execution and limit near term multiple expansion.
Given that several price targets already embed robust earnings and margin improvement, some observers see less room for upside if execution is merely solid rather than exceptional. This increases the importance of flawless delivery against the growth and margin targets baked into current expectations.

What's in the News

Astronics confirmed fourth quarter 2025 sales guidance of $225 million to $235 million, implying a sharp sequential acceleration in revenue as major aerospace programs ramp. (Company guidance)
The company projected full year 2025 revenue of $847 million to $857 million, which would mark a record annual sales level and roughly 7 percent growth versus 2024 at the midpoint. (Company guidance)
Astronics reported no share repurchases between July 1 and September 30, 2025, and noted that it has completed the previously authorized buyback with 310,042 shares repurchased for $8.49 million since 2019. (Company filing)

Valuation Changes

Fair Value: edged down from $62.75 to approximately $61.18, reflecting modestly lower long term assumptions.
Discount Rate: risen slightly from about 7.90 percent to roughly 7.94 percent, indicating a marginally higher required return.
Revenue Growth: trimmed from approximately 8.77 percent to about 8.33 percent annually, signaling a small reduction in top line expectations.
Net Profit Margin: fallen significantly from around 21.19 percent to roughly 14.82 percent, implying a more conservative long term profitability outlook.
Future P/E: increased meaningfully from about 12.5x to roughly 17.7x, suggesting a higher valuation multiple applied to forward earnings despite softer margin assumptions.

Rising aircraft production and global air travel demand are fueling growth in Astronics' high-margin product offerings and strengthening its recurring revenue streams.
Strategic portfolio optimization and enhanced certification capabilities are improving profitability and positioning the company for long-term earnings growth and industry leadership.
High exposure to trade tariffs, legal risk, poor execution in testing, reliance on aerospace, and disruptive restructuring all threaten earnings stability and profit margins.

Catalysts

About Astronics

Through its subsidiaries, designs and manufactures products for the aerospace, defense, and electronics industries in the United States, rest of North America, Asia, Europe, South America, and internationally.What are the underlying business or industry changes driving this perspective?

Production rate increases for major commercial aircraft platforms (such as Boeing 737, Airbus A320, and expected ramp-ups for 787, A350, and new programs like the A220) are likely to drive continued growth in demand for Astronics' power, lighting, and connectivity solutions, supporting both revenue acceleration and operating leverage through 2025 and beyond.
Continued global growth in air travel and airline fleet renewals boost both OEM sales and retrofit opportunities for cabin power, inflight connectivity, and entertainment products-strengthening recurring revenue streams and fostering pricing power, as reflected by ongoing successful price increases across major OEM and airline customers.
Strategic portfolio actions-including exiting low-margin/non-core product lines, rationalizing facilities, and a sharpened focus on higher-margin aerospace segments-are simplifying the business, improving gross margins, and supporting a sustainable step-up in net margins.
Enhanced FAA certification capability (via the Envoy Aerospace acquisition) positions Astronics to better capitalize on the growing trend toward aircraft digital transformation, retrofits, and regulatory-driven upgrades, attracting higher-value contracts and reducing schedule risks-all with positive implications for long-term earnings.
Cost and cash discipline-evidenced by major cost savings initiatives, active tariff mitigation plans, and a healthy, flexible balance sheet-provide headroom for further margin expansion, potential share repurchases, and opportunistic acquisitions to diversify and stabilize earnings.

Astronics Future Earnings and Revenue Growth

Assumptions

How have these above catalysts been quantified?

Analysts are assuming Astronics's revenue will grow by 5.1% annually over the next 3 years.
Analysts assume that profit margins will increase from -0.5% today to 9.0% in 3 years time.
Analysts expect earnings to reach $86.1 million (and earnings per share of $1.23) by about September 2028, up from $-3.7 million today.
In order for the above numbers to justify the analysts price target, the company would need to trade at a PE ratio of 19.7x on those 2028 earnings, up from -349.5x today. This future PE is lower than the current PE for the US Aerospace & Defense industry at 34.4x.
Analysts expect the number of shares outstanding to grow by 0.41% per year for the next 3 years.
To value all of this in today's terms, we will use a discount rate of 7.92%, as per the Simply Wall St company report.

Astronics Future Earnings Per Share Growth

Risks

What could happen that would invalidate this narrative?

Astronics faces significant risks from new tariffs, with $15–$20 million in additional annualized costs-up to a quarter of which are related to sourcing from China, which is harder to move. While mitigation efforts are underway, ongoing trade tensions and tariff unpredictability could impact cost structure and squeeze net margins.
The company incurred material setbacks and losses in its Test segment due to inaccurate program cost estimates and required an external consultant to implement better management systems; repeated execution risk and project overruns in Test (a historically weak segment) threaten revenues, operating profits, and overall earnings stability.
Astronics is undergoing restructuring, exiting lower margin/non-core businesses and closing facilities-actions that create near-term costs and underline a need to simplify the portfolio. If not managed successfully, ongoing portfolio realignment could disrupt revenue streams and compress net margins in the transition.
The company cited an adverse UK patent dispute, resulting in $21.6 million in cash outflows in damages, interest, and legal fees in a single quarter, highlighting the risk of IP litigation and potential future legal or compliance costs that could erode cash reserves and profits.
Heavy reliance on commercial aerospace cycles (now about 85–90% of revenues) exposes Astronics to demand volatility. Further delays in major production ramps (such as Boeing 737 and the U.S. Army radio test program) or industry shocks could significantly suppress revenue and earnings growth, given limited near-term diversification.

Valuation

How have all the factors above been brought together to estimate a fair value?

The analysts have a consensus price target of $38.583 for Astronics based on their expectations of its future earnings growth, profit margins and other risk factors. However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of $49.0, and the most bearish reporting a price target of just $32.75.
In order for you to agree with the analyst's consensus, you'd need to believe that by 2028, revenues will be $956.5 million, earnings will come to $86.1 million, and it would be trading on a PE ratio of 19.7x, assuming you use a discount rate of 7.9%.
Given the current share price of $36.8, the analyst price target of $38.58 is 4.6% higher. The relatively low difference between the current share price and the analyst consensus price target indicates that they believe on average, the company is fairly priced.
We always encourage you to reach your own conclusions though. So sense check these analyst numbers against your own assumptions and expectations based on your understanding of the business and what you believe is probable.

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Disclaimer

AnalystConsensusTarget is a tool utilizing a Large Language Model (LLM) that ingests data on consensus price targets, forecasted revenue and earnings figures, as well as the transcripts of earnings calls to produce qualitative analysis. The narratives produced by AnalystConsensusTarget are general in nature and are based solely on analyst data and publicly-available material published by the respective companies. These scenarios are not indicative of the company's future performance and are exploratory in nature. Simply Wall St has no position in the company(s) mentioned. Simply Wall St may provide the securities issuer or related entities with website advertising services for a fee, on an arm's length basis. These relationships have no impact on the way we conduct our business, the content we host, or how our content is served to users. The price targets and estimates used are consensus data, and do not constitute a recommendation to buy or sell any stock, and they do not take account of your objectives, or your financial situation. Note that AnalystConsensusTarget's analysis may not factor in the latest price-sensitive company announcements or qualitative material.

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