
AAR CORP. (AIR) Stock Forecast & Price Target
AAR CORP. (AIR) Analyst Ratings
Bulls say
AAR is attractive because its core commercial aftermarket business is showing clear operational acceleration, with 4Q26 organic adjusted sales growth of 13% driven by 19% organic growth in new parts distribution, record component MRO activity, higher airframe MRO volumes, and rising recurring revenue from Trax, while fiscal 1Q27 guidance still points to 21%–23% total sales growth and 12.25%–12.75% adjusted EBITDA margins excluding Legacy Commercial Programs. Its investment case is further strengthened by improving balance-sheet discipline, as net debt fell to $816M and net leverage improved to 2.0x from 2.2x, alongside 24% full-year adjusted operating cash conversion and a stated path toward 30%+ operating cash conversion through better receivables and inventory turns. AAR also appears undervalued relative to its growth and execution improvement, with margin expansion potential not yet fully reflected, support from new OEM parts distribution agreements and MRO capacity expansion coming online in 1Q27, and additional optionality from strategic M&A and a more favorable mix after portfolio optimization.
Bears say
AAR is viewed negatively because its Legacy Commercial Business is still expected to remain on the books for 3-4 years, with a modeled annual revenue step-down of about $60M and revenue only just above $50M in FY29, creating a prolonged drag on growth and capital allocation. The company also faces structural margin pressure from its relatively lower-margin profile, and while management is targeting EBITDA margins in the 13-14%+ range and the current strategy may lift margins north of 15%, execution risk remains elevated given competitive pricing, possible normalization in USM, and a possible slowdown in airline outsourcing that could hit both Repair & Engineering and Parts Supply. AAR’s outlook is further weakened by customer and program-specific risks, including the termination of a regional airline program in Q4 FY2024 with a $4.8M net termination charge in FY2024 and $29.4M of receivables remaining at May 31, 2025, which highlights operating volatility and credit exposure despite its stronger parts trading and distribution exposure.
This aggregate rating is based on analysts' research of AAR CORP. and is not a guaranteed prediction by Public.com or investment advice.
AAR CORP. (AIR) Analyst Forecast & Price Prediction
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