AAR (NYSE:AIR) Issues Quarterly Earnings Results, Beats Estimates By $0.15 EPS

AAR (NYSE:AIR) released its earnings results on Tuesday. The aerospace company reported $1.53 EPS for the quarter, beating analysts’ consensus estimates of $1.38 by $0.15, Zacks reports. AAR had a return on equity of 12.39% and a net margin of 5.46%.The business had revenue of $928.00 million for the quarter, compared to analysts’ expectations of $893.03 million. During the same quarter in the prior year, the firm earned $1.16 earnings per share.

Here are the key takeaways from AAR’s conference call:

• AAR reported a record quarter with sales up 26% to $928 million, adjusted EBITDA up 27% to $116 million, and adjusted EPS up 32% to $1.53, reflecting strong execution across its parts, repair, and software platform.
• Management said the business continues to see strong end-market demand, with commercial distribution and repair activity remaining robust and software products like Trax, AeroStrat, and Airvoyant gaining traction.
• The company is seeing meaningful progress in its strategic initiatives, including a new Woodward distribution agreement, expanding airframe MRO capacity, and a large $305 million Navy/Marine Corps contract that supports government business.
• HAECO Americas integration is progressing ahead of schedule but remains a near-term margin drag; management expects margins at the acquired facilities to reach AAR’s normal levels in the second half of fiscal 2027.
• Free cash flow and balance sheet trends improved, with net leverage falling to 2.03x and management reiterating confidence in continued deleveraging and M&A, while guiding fiscal 2027 for low-double-digit to low-teens sales growth excluding Legacy Commercial Programs.

AAR Stock Up 4.5%

Shares of AAR stock opened at $141.82 on Wednesday. The company has a debt-to-equity ratio of 0.54, a quick ratio of 1.23 and a current ratio of 2.70. AAR has a 52-week low of $71.43 and a 52-week high of $146.75. The company’s 50 day moving average price is $125.44 and its 200-day moving average price is $115.33. The stock has a market capitalization of $5.64 billion, a price-to-earnings ratio of 31.45 and a beta of 1.09.

Institutional Investors Weigh In On AAR

Institutional investors have recently added to or reduced their stakes in the company. Corient Private Wealth LLC purchased a new position in shares of AAR in the fourth quarter valued at about $244,000. Invesco Ltd. boosted its holdings in shares of AAR by 7.7% during the fourth quarter. Invesco Ltd. now owns 1,122,792 shares of the aerospace company’s stock worth $92,956,000 after purchasing an additional 80,265 shares during the period. Skyview Financial Group LLC bought a new stake in shares of AAR in the fourth quarter worth about $2,845,000. State of Tennessee Department of Treasury grew its stake in shares of AAR by 23.0% in the fourth quarter. State of Tennessee Department of Treasury now owns 15,902 shares of the aerospace company’s stock worth $1,317,000 after purchasing an additional 2,972 shares during the last quarter. Finally, Fuller & Thaler Asset Management Inc. increased its holdings in AAR by 22.3% during the 4th quarter. Fuller & Thaler Asset Management Inc. now owns 672,877 shares of the aerospace company’s stock valued at $55,707,000 after purchasing an additional 122,672 shares during the period. Hedge funds and other institutional investors own 90.74% of the company’s stock.

Analysts Set New Price Targets

AIR has been the subject of a number of research reports. Wall Street Zen cut AAR from a “strong-buy” rating to a “buy” rating in a report on Sunday, June 14th. Jefferies Financial Group raised their price objective on AAR from $150.00 to $155.00 and gave the company a “buy” rating in a report on Tuesday, July 14th. Royal Bank Of Canada boosted their target price on AAR from $105.00 to $125.00 and gave the stock an “outperform” rating in a research report on Wednesday, March 25th. Weiss Ratings cut shares of AAR from a “buy (b)” rating to a “buy (b-)” rating in a research report on Wednesday, July 8th. Finally, Zacks Research raised shares of AAR from a “hold” rating to a “strong-buy” rating in a research note on Friday, July 10th. Two equities research analysts have rated the stock with a Strong Buy rating, three have assigned a Buy rating and two have assigned a Hold rating to the company. Based on data from MarketBeat.com, the company has an average rating of “Buy” and a consensus price target of $132.20.

About AAR

AAR Corp. (NYSE: AIR) is a global provider of aviation products and services to commercial, government and defense customers. The company offers a comprehensive portfolio of maintenance, repair and overhaul (MRO) solutions, component repair and overhaul, and engineering services designed to support a wide variety of fixed-wing and rotary aircraft. Leveraging FAA and EASA certifications, AAR delivers turnkey maintenance programs and ad hoc repair services that enhance aircraft availability and reliability.

In its Aviation Supply Chain Services segment, AAR sources, stores and distributes parts for both commercial airlines and military operators.