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AAR
(NYSE:AIR)
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Rating:64Neutral
Price Target:
$153.00
▲(18.56% Upside)
Action:Reiterated
Date:07/24/26
The score is driven primarily by improving financial performance and a constructive earnings outlook, including raised guidance and continued growth catalysts, but is held back by weak/volatile cash conversion and a valuation that offers limited cushion. Technicals are mixed, with near-term softness versus the 20-day trend despite strength over longer moving averages.
Positive Factors
Earnings & Margin Recovery
AAR's multi-quarter earnings rebound and improved operating/net margins indicate the core services and parts businesses are reasserting pricing power and operational control. Sustained margin recovery supports reinvestment, debt reduction targets, and durable cash generation over the medium term.
Negative Factors
Weak Cash Conversion
Operating cash flow and free cash flow remain modest relative to earnings, with historically volatile conversion. Persistent working-capital swings or timing-driven cash variability can limit funding for capex, M&A synergies, and debt reduction, constraining financial flexibility.
Read all positive and negative factors
Positive Factors
Negative Factors
Earnings & Margin Recovery
AAR's multi-quarter earnings rebound and improved operating/net margins indicate the core services and parts businesses are reasserting pricing power and operational control. Sustained margin recovery supports reinvestment, debt reduction targets, and durable cash generation over the medium term.
Read all positive factors
AAR (AIR) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$5.59B
Dividend YieldN/A
Average Volume (3M)525.98K
Price to Earnings (P/E)28.7
Beta (1Y)1.14
Revenue Growth18.97%
EPS Growth1317.49%
CountryUS
Employees7,100
SectorIndustrials
Sector Strength72
IndustryAerospace & Defense
Share Statistics
EPS (TTM)4.88
Shares Outstanding39,892,470
10 Day Avg. Volume587,216
30 Day Avg. Volume525,982
Financial Highlights & Ratios
PEG Ratio0.02
Price to Book (P/B)2.47
Price to Sales (P/S)1.27
P/FCF Ratio42.68
Enterprise Value/Market Cap<0.01
Enterprise Value/Revenue<0.01
Enterprise Value/Gross Profit<0.01
Enterprise Value/Ebitda<0.01
Forecast
1Y Price Target
$196.34Price Target Upside52.15% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering5
EPS Forecast (FY)5.72
Revenue Forecast (FY)$3.65B
AAR Business Overview & Revenue Model
Company Description
AAR Corp. delivers a wide array of products and services to the global commercial aviation, government, and defense sectors. Its Aviation Services division focuses on comprehensive aftermarket support, encompassing inventory management, distributi...
How the Company Makes Money
AAR primarily makes money by selling aviation services and aviation parts/supply-chain solutions to airlines, defense customers, and government agencies. A key revenue stream comes from maintenance, repair and overhaul (MRO) work, where AAR is pai...
AAR Earnings Call Summary
Earnings Call Date:Mar 24, 2026
(Q3-2026)
| % Change Since: |
Next Earnings Date:Sep 29, 2026
Earnings Call Sentiment Positive
The call emphasized strong, broad-based revenue and profitability growth driven by parts distribution, favorable government demand, accretive M&A (ADI), and Trax software momentum. Near-term lowlights center on margin dilution and operational work required from the HAECO Americas integration, plus facility transitions and geopolitical uncertainty. Management provided improved guidance and clear timelines for integration-driven margin recovery, and cash flow/leverage metrics remained strong.Positive Updates
Strong Top-Line Growth
Total sales grew 25% year-over-year to $845 million, including 14% organic adjusted sales growth. Q3 results drove full-year sales growth guidance to approximately 19% with organic sales growth expected around 12%.
Negative Updates
HAECO Americas Integration Headwinds and Margin Dilution
HAECO Americas acquisition caused short-term margin pressure in Repair & Engineering. The quarter recorded actions to rightsizing and a bargain purchase accounting gain (excluded from adjusted results), and management noted this was the most critical integration quarter.
Read all updates
Q3-2026 Updates
Positive
Negative
Strong Top-Line Growth
Total sales grew 25% year-over-year to $845 million, including 14% organic adjusted sales growth. Q3 results drove full-year sales growth guidance to approximately 19% with organic sales growth expected around 12%.
Read all positive updates
Company Guidance
AAR guided Q4 total adjusted sales growth of 19–21% with organic adjusted sales growth of 6–8% (excluding the landing‑gear divestiture and fiscal‑2026 acquisitions) and an expected Q4 operating margin of 10.2–10.5%; for the full year management now expects roughly 19% total sales growth and about 12% organic sales growth (an upward revision), said net leverage remains targeted at 2.0x–2.5x (Q3 closed at 2.17x net debt/adjusted EBITDA), and the company expects to be cash‑flow positive in Q4 and for the full fiscal year.AAR Financial Statement Overview
Summary
Income Statement
74
Positive
Balance Sheet
63
Positive
Cash Flow
55
Neutral
| Breakdown | May 2026 | May 2025 | May 2024 | May 2023 | May 2022 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 3.31B | 2.78B | 2.32B | 1.99B | 1.82B |
| Gross Profit | 622.00M | 527.70M | 442.30M | 370.10M | 313.20M |
| EBITDA | 345.90M | 169.50M | 142.70M | 161.30M | 144.20M |
| Net Income | 187.70M | 12.50M | 46.30M | 90.20M | 78.70M |
Balance Sheet | |||||
| Total Assets | 3.36B | 2.84B | 2.77B | 1.83B | 1.57B |
| Cash, Cash Equivalents and Short-Term Investments | 84.00M | 96.50M | 85.80M | 68.40M | 53.50M |
| Total Debt | 995.00M | 1.05B | 1.07B | 317.90M | 156.30M |
| Total Liabilities | 1.65B | 1.63B | 1.58B | 734.00M | 539.40M |
| Stockholders Equity | 1.70B | 1.21B | 1.19B | 1.10B | 1.03B |
Cash Flow | |||||
| Free Cash Flow | 98.70M | 1.40M | 13.90M | -6.20M | 57.90M |
| Operating Cash Flow | 98.70M | 36.10M | 43.60M | 23.30M | 75.20M |
| Investing Cash Flow | -308.70M | 10.70M | -758.50M | -138.00M | -16.50M |
| Financing Cash Flow | 208.60M | -33.70M | 729.20M | 137.70M | -59.80M |
AAR Technical Analysis
Positive
129.05
Price Trends
132.35
Positive
122.32
Positive
108.72
Positive
Market Momentum
3.57
Negative
56.00
Neutral
65.33
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For AIR, the sentiment is Positive. The current price of 129.05 is below the 20-day moving average (MA) of 137.73, below the 50-day MA of 132.35, and above the 200-day MA of 108.72, indicating a bullish trend. The MACD of 3.57 indicates Negative momentum. The RSI at 56.00 is Neutral, neither overbought nor oversold. The STOCH value of 65.33 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for AIR.
AAR Risk Analysis
AAR disclosed 24 risk factors in its most recent earnings report. AAR reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
AAR Peers Comparison
UnderperformOutperform
Sector (63)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
76 Outperform | $41.42B | 62.96 | 17.82% | 0.04% | 18.80% | 30.84% | |
67 Neutral | $5.45B | 78.07 | 3.73% | 0.20% | 7.87% | 229.36% | |
66 Neutral | $9.74B | 32.57 | 12.12% | ― | 15.02% | 319.25% | |
64 Neutral | $5.59B | 28.70 | 12.19% | ― | 18.97% | 1317.49% | |
64 Neutral | $5.42B | 37.00 | 3.27% | ― | 26.11% | 801.19% | |
63 Neutral | $10.79B | 15.43 | 7.44% | 2.01% | 2.89% | -14.66% | |
60 Neutral | $2.70B | -77.16 | -3.69% | ― | 6.48% | -191.94% |
* Industrials Sector Average
AIR
AAR
143.06
67.66
89.73%
DCO
Ducommun
197.07
107.93
121.08%
HEI
HEICO
367.58
55.34
17.72%
VSEC
VSE
218.18
64.85
42.30%
AMTM
Amentum Holdings, Inc.
24.77
-0.58
-2.29%
SARO
StandardAero, Inc.
29.19
0.88
3.11%
AAR Corporate Events
Business Operations and StrategyExecutive/Board Changes
AAR Approves Special Long-Term Incentive Grant
Positive
Jul 24, 2026
On July 23, 2026, AAR’s Human Capital and Compensation Committee approved a special long-term performance incentive grant of 161,500 shares of performance-based restricted stock to Chairman and CEO John M. Holmes, with a targeted grant date ...
Business Operations and StrategyFinancial Disclosures
AAR Unveils New Segment Structure at Investor Day
Neutral
May 12, 2026
On May 12, 2026, AAR CORP. hosted an in‑person Investor Day in New York City, complemented by a public webcast, where senior leaders outlined strategic priorities, growth initiatives, and financial objectives for the business. The company al...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.