AIR Should I Buy
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AAR Corp is not a strong buy at the moment for a beginner investor with a long-term strategy. While the company has shown revenue growth and positive industry fundamentals, its declining net income, EPS, and limited free cash flow generation raise concerns. Additionally, no strong trading signals or significant catalysts are present to justify immediate action.
The stock's moving averages are bullish (SMA_5 > SMA_20 > SMA_200), indicating an upward trend. However, the MACD is negatively expanding, and RSI is neutral at 67.945. The stock is trading near resistance levels (R1: 116.183), suggesting limited short-term upside potential.
Revenue growth of 15.92% YoY in Q2
Appointment of a new CFO with reaffirmed financial guidance and a target of 17% sales growth.
Positive industry outlook for aerospace aftermarket demand and rising aircraft production.
Net income dropped significantly by -213.07% YoY, and EPS fell by -204.60% YoY.
Margins remain below the aerospace supplier average, and free cash flow generation is limited.
Analysts highlight near-term margin pressure due to acquisition dilution.
In Q2 2026, AAR Corp reported revenue growth of 15.92% YoY, but net income and EPS saw significant declines (-213.07% and -204.60%, respectively). Gross margin improved slightly to 19.73%, up 5.28% YoY.
Analysts are mixed on AAR Corp. Truist, RBC Capital, and Jefferies maintain Buy or Outperform ratings with price targets ranging from $99 to $107, citing strong industry fundamentals and growth potential. However, Goldman Sachs initiated coverage with a Neutral rating and a $121 price target, citing below-average profitability and limited free cash flow.
