AAR today
- 52 week range
- $54.71
▼
$76.34
- P/E ratio
- 250.91
- Target price
- $81.50
AAR Corp. New York Stock Exchange: AIR is a leading provider of aviation services to commercial and government customers worldwide. They offer aircraft aftermarket support to airlines, OEMs, fleets, military departments and operators. The aerospace industry leader also has one of the largest inventories of used and new aircraft parts, as well as a network of maintenance, repair and overhaul (MRO) facilities offering comprehensive, integrated solutions to its customers.
Unlike its competitors, Boeing Company New York Stock Exchange: BA or Airbus SE OTSMKTS: EADSYAAR is an independent supplier not affiliated with any specific airline or manufacturer and provides impartial and objective solutions. The company reported an impressive 26% year-over-year revenue growth, driven by record sales and improved profitability.
Star top and bottom hit and raise
AAR reported second-quarter fiscal 2025 earnings per share of 90 cents, beating the consensus estimate by 5 cents. Revenue grew 30% YoY to $686.1 million, beating the consensus estimate of $654.47 million. Organic growth was 12% YoY, accelerating sequentially from 6% in the first quarter. Adjusted EBITDA margin increased to 11.4% from 10.1% in the same period last year. Profitability growth is expected to continue as the company optimizes its portfolio and improves efficiency.
Strong segment growth driven by commercial and government business
AAR MarketRank™ Stock Analysis
- Overall MarketRank™
- 64th percentile
- Analyst rating
- Buy
- Pros/Cons
- Growth potential 16.0%
- Short interest level
- Healthy
- Dividend Power
- N/A
- Environmental assessment
- N/A
- Mood News
- 0.57
- Insider trading
- Sale of shares
- Project Profit Growth
- 21.33%
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The Parts and Supplies division posted sales growth of 20% year-over-year, driven by increased business distribution of new parts and renewed growth in used service materials (USM) sales. Availability has been improved to meet the sustained demand for airframe and engine components.
Maintenance equipment sales increased 57% year-over-year, driven by significant contributions from product support acquisitions and improved efficiencies in the heavy maintenance hangars. Commercial customers accounted for 73% of consolidated sales, up from 71% last year. Government sales were up 16% year-over-year due to increased orders for new parts distribution.
AAR won new business this quarter
A multi-year engine parts supply agreement has been entered into with parts manufacturer approval (PMA) Chromalloy for the CF6-80C2 engine type. AAR will distribute Whippany Actuation Systems components and assemblies for its line of actuators. Singapore Airlines has renewed its contract for Airinmar’s full range of repair cycle management services. AAR has agreed to form a joint venture in the Asia-Pacific region with Air France Industries KLM Engineering & Maintenance to support next-generation aircraft. AAR will sell its chassis overhaul business for $51 million as part of a portfolio optimization strategy.
AAR CEO John M. Holmes commented, “We expect strong sales growth to continue in the second half of fiscal 2025. We also expect continued earnings growth in the same period as we realize the benefits of continued growth in parts supply, synergies from the acquisition of Product Support and the completion of our recently announced sale. These earnings are expected to increase further in fiscal 2026 as we grow our more profitable Product Support business and expand our hangars in Miami and Oklahoma City. online.”
AIR shares are shaped like a symmetrical triangle
A symmetrical triangle consists of a descending (falling) upper resistance line converging with an ascending (rising) lower support line at the top point. A breakout occurs when a stock rises above the upper trend line resistance line. A breakout occurs when a stock falls below the lower support line of the trend line. A breakout or breakdown becomes noticeable as the stock approaches a top and the channel narrows.
AIR formed a symmetrical triangle with descending upper trendline resistance that began at $76.34 on July 18, 2024 and ascending lower trendline support that began at $54.71 on August 5, 2024 and merging at the top. Lower trendline support has been tested to bounce twice, and upper trendline resistance is being tested a second time in an attempt to break out after missing out on a solid Q2 earnings report. The daily flat support VWAP is $64.41. The daily RSI rises to the 64-band. Fibonacci (Fibonacci retracement support levels are located at $64.82, $62.00, $59.19 and $55.17.
AIR’s average target price is $81.00which implies a growth potential of 19.84%. and his highest analyst price target is at US$81. Has four Buy ratings from analysts. The short interest on the stock is 1.71%.
Actionable Option Strategies: Bullish investors may consider using cash-backed puts at Fibonacci retracement support levels to buy the dip. If the stock is allocated, then writing covered calls at high Fibonacci levels implements a wheel strategy to generate income.
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