AAR CORP. (AIR) Stock Forecast & Price Target

AAR is projected to see increasing revenues and earnings in the coming years, driven by strong customer demand and a strong backlog of contracts. Additionally, the company's focus on expanding its aftermarket services and its commitment to sustainability and social responsibility are expected to drive long-term growth and profitability. With a solid financial position and a strong market position in the aerospace and defense industry, AAR is positioned for continued success in the future.

AAR is primarily exposed to the cyclicality of the aviation, government, and defense markets, as well as potential risks such as Defense budget cuts, rising oil prices, and disruptions due to global events like a recession, terror attacks, and pandemics. Its recent strong fiscal 3Q26 performance and upbeat outlook may suggest short-term resilience, but long-term growth will largely depend on the company's ability to execute and expand its market share in the commercial aftermarket, while also minimizing losses in its DoD-exposed revenue streams. With its relatively low-cost outsourced MRO offerings and parts distribution capabilities, AAR may have a competitive advantage in cost-conscious times, but investors should closely monitor any shift in the company's overall AM narrative.