AAR Corp. (AIR)
NYSE:AIR
Want to see AIR full AI Analyst Report?
Top Page
AAR
(NYSE:AIR)
Select Model
Select Model
Rating:65Neutral
Price Target:
$141.00
▲(14.60% Upside)
Action:Reiterated
Date:04/25/26
The score is primarily held back by uneven cash-flow conversion and volatility despite improved earnings and better leverage trends. Offsetting that, the latest earnings call was a clear positive with improved growth and margin guidance, while technicals are mixed (near-term weakness but longer-term uptrend intact) and valuation appears reasonable at a 16.283 P/E.
Positive Factors
Parts Supply Growth & Margin Expansion
Sustained, high-single-digit to double-digit parts growth and meaningful margin expansion reflect scale advantages in distribution and inventory programs. Durable aftermarket parts leadership drives recurring, flight‑driven revenue and higher-margin cash flows that support long-term profitability and resilience versus cyclical OEM exposure.
Negative Factors
Inconsistent Cash Conversion
Weak and volatile conversion of earnings into operating cash constrains internal funding for capital, acquisitions and debt paydown. Persistent working‑capital swings in parts distribution and lumpy contract timing make cash generation unpredictable, limiting financial flexibility even as earnings improve.
Read all positive and negative factors
Positive Factors
Negative Factors
Parts Supply Growth & Margin Expansion
Sustained, high-single-digit to double-digit parts growth and meaningful margin expansion reflect scale advantages in distribution and inventory programs. Durable aftermarket parts leadership drives recurring, flight‑driven revenue and higher-margin cash flows that support long-term profitability and resilience versus cyclical OEM exposure.
Read all positive factors
AAR (AIR) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$5.22B
Dividend YieldN/A
Average Volume (3M)369.14K
Price to Earnings (P/E)28.7
Beta (1Y)1.21
Revenue Growth16.85%
EPS GrowthN/A
CountryUS
Employees5,700
SectorIndustrials
Sector Strength72
IndustryAerospace & Defense
Share Statistics
EPS (TTM)4.55
Shares Outstanding39,764,267
10 Day Avg. Volume367,454
30 Day Avg. Volume369,139
Financial Highlights & Ratios
PEG Ratio-2.39
Price to Book (P/B)1.80
Price to Sales (P/S)0.79
P/FCF Ratio1.56K
Enterprise Value/Market Cap1.16
Enterprise Value/Revenue1.93
Enterprise Value/Gross Profit10.16
Enterprise Value/Ebitda16.11
Forecast
1Y Price Target
$133.75Price Target Upside8.70% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering5
EPS Forecast (FY)5.65
Revenue Forecast (FY)$3.62B
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 aftermarket services and products under multi-year contracts and recurring, flight-driven demand from operators.
Key revenue streams include:
1) Maintenance, Repair & Overhaul (MRO) services: AAR earn...
AAR Earnings Call Summary
Earnings Call Date:Mar 24, 2026
(Q3-2026)
| % Change Since: |
Next Earnings Date:Jul 21, 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
46
Neutral
| Breakdown | TTM | May 2025 | May 2024 | May 2023 | May 2022 | May 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 3.13B | 2.78B | 2.32B | 1.99B | 1.82B | 1.65B |
| Gross Profit | 595.50M | 527.70M | 442.30M | 370.10M | 313.20M | 275.90M |
| EBITDA | 375.40M | 169.50M | 142.70M | 161.30M | 144.20M | 73.10M |
| Net Income | 171.00M | 12.50M | 46.30M | 90.20M | 78.70M | 35.80M |
Balance Sheet | ||||||
| Total Assets | 3.33B | 2.84B | 2.77B | 1.83B | 1.57B | 1.54B |
| Cash, Cash Equivalents and Short-Term Investments | 100.10M | 96.50M | 85.80M | 68.40M | 53.50M | 51.80M |
| Total Debt | 979.70M | 1.05B | 1.07B | 317.90M | 156.30M | 193.60M |
| Total Liabilities | 1.69B | 1.63B | 1.58B | 734.00M | 539.40M | 565.30M |
| Stockholders Equity | 1.64B | 1.21B | 1.19B | 1.10B | 1.03B | 974.40M |
Cash Flow | ||||||
| Free Cash Flow | 35.70M | 1.40M | 13.90M | -6.20M | 57.90M | 93.90M |
| Operating Cash Flow | 94.80M | 36.10M | 43.60M | 23.30M | 75.20M | 105.20M |
| Investing Cash Flow | -224.20M | 10.70M | -758.50M | -138.00M | -16.50M | -500.00K |
| Financing Cash Flow | 128.60M | -33.70M | 729.20M | 137.70M | -59.80M | -469.50M |
AAR Technical Analysis
Positive
123.04
Price Trends
115.04
Positive
112.78
Positive
98.28
Positive
Market Momentum
4.43
Negative
67.75
Neutral
87.14
Negative
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 123.04 is above the 20-day moving average (MA) of 115.61, above the 50-day MA of 115.04, and above the 200-day MA of 98.28, indicating a bullish trend. The MACD of 4.43 indicates Negative momentum. The RSI at 67.75 is Neutral, neither overbought nor oversold. The STOCH value of 87.14 is Negative, 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 |
|---|---|---|---|---|---|---|---|
65 Neutral | $5.22B | 28.73 | 12.07% | ― | 16.85% | ― | |
63 Neutral | $10.79B | 15.43 | 7.44% | 2.01% | 2.89% | -14.66% | |
62 Neutral | $6.96B | -473.54 | -0.96% | ― | 8.95% | 78.82% | |
61 Neutral | $2.49B | -74.90 | -4.86% | ― | 6.48% | -191.94% | |
61 Neutral | $5.57B | 87.15 | 4.14% | 0.22% | 7.87% | 229.36% |
* Industrials Sector Average
AIR
AAR
129.96
62.28
92.02%
DCO
Ducommun
162.60
83.21
104.81%
MRCY
Mercury Systems
112.44
60.12
114.91%
VSEC
VSE
199.12
64.99
48.45%
AAR Corporate Events
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...
Business Operations and StrategyFinancial DisclosuresRegulatory Filings and Compliance
AAR Corp Restructures Operating Segments, Winds Down Commercial Programs
Neutral
May 6, 2026
On May 6, 2026, AAR CORP. announced a reorganization of its operating segments and the wind-down of its Commercial Programs business, following changes implemented by its chief operating decision maker in the fourth quarter of fiscal 2026. The com...
Business Operations and StrategyM&A Transactions
AAR Completes Acquisition to Expand Aircraft Engineering Capabilities
Positive
Apr 24, 2026
On April 24, 2026, AAR CORP. completed the $35 million all-cash acquisition of Aircraft Reconfig Technologies LLC, an engineering firm specializing in passenger aircraft reconfiguration, from ZIM Aircraft Cabin Solutions. The deal, executed throug...
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.