William Blair analyst Louie DiPalma has maintained their bullish stance on AIR stock, giving a Buy rating today.
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Louie DiPalma has given his Buy rating due to a combination of factors that highlight AAR’s strong performance and growth potential. The company has demonstrated impressive normalized organic growth, particularly in its fiscal fourth quarter, where it saw a 14% increase, up from 6% in the previous quarter. This growth is further supported by a significant contract with Delta Airlines, which is expected to contribute substantially to future revenue. Additionally, AAR has shown strength in its government customer sales across major product categories, with expectations of continued strong sales of new aircraft parts to these customers.
AAR’s financial metrics also support the Buy rating, with adjusted operating profit and revenue surpassing consensus estimates. The company reported an adjusted operating profit of $76.9 million, exceeding the expected $68.2 million, and a fourth-quarter revenue of $755 million, above the anticipated $695 million. The closure of a New York facility is projected to yield $10 million in cost synergies, further enhancing profitability. These factors, combined with the anticipated doubling of Trax revenue and the scaling of parts distribution and repair businesses, suggest a potential share appreciation of over 20% in the next year.
In another report released today, KeyBanc also maintained a Buy rating on the stock with a $86.00 price target.