Should You Buy AAR Corp (AIR) Today? Analysis, Price Targets, and 2026 Outlook.
Conclusion
Buy
Latest Price
105.090
1 Day change
-1.48%
52 Week Range
108.360
Analysis Updated At
2026/01/28
BUY for a beginner long-term investor right now. AIR is in a clear bullish trend (stacked bullish moving averages) with supportive options sentiment and generally positive Wall Street positioning/price targets. While insider selling and the latest quarter’s sharp EPS decline are real negatives, the revenue growth and improving gross margin alongside strong aerospace aftermarket demand make the risk/reward acceptable for an impatient long-term buyer at the current pre-market price (~106.96).
Technical Analysis
Trend is bullish. Moving averages are strongly supportive (SMA_5 > SMA_20 > SMA_200), indicating an established uptrend. MACD histogram is positive (0.486) but contracting, suggesting upside momentum is still positive though cooling. RSI_6 is 65.4 (upper-neutral), meaning the stock is not extremely overbought yet but is closer to a momentum/extended zone than a bargain zone. Key levels: Pivot 103.09 is the nearby trend-defining support; first support S1 99.00. Resistance is close overhead: R1 107.18 and R2 109.71—current pre-market (~106.96) sits just below R1, so a breakout above ~107.2 would confirm continuation, while a fade would likely retest ~103.
Options Data
Bullish
Open Interest Put-Call Ratio
Bullish
Option Volume Put-Call Ratio
Options positioning leans bullish: open interest put/call of 0.88 suggests slightly more calls than puts outstanding, and the put/call volume ratio of 0.11 shows call volume dominating today’s flow (bullish near-term sentiment). Implied volatility (30D ~39.8) is above historical volatility (~35.6) and IV percentile is elevated (75.6), implying the market is pricing higher-than-usual uncertainty; this is not a bearish signal by itself, but it does indicate options are relatively expensive and expectations for movement are elevated.
Technical Summary
Sell
4
Buy
7
Positive Catalysts
Aerospace aftermarket demand remains structurally strong (supported by analyst commentary on sustained aftermarket demand and rising aircraft production).
Margin setup longer-term is viewed positively by some analysts (RBC noted an encouraging margin setup into fiscal 2027; synergy/cost actions could lift profitability).
Industry tailwinds from efficiency upgrades/retrofits (news mentions winglets market growth through 2030, broadly supportive for aircraft upgrade ecosystems, indirectly benefiting aftermarket service providers).
Neutral/Negative Catalysts
Insider activity is a clear negative: insiders are selling, with selling up ~236% over the last month (often a sentiment overhang).
Profitability volatility: FY2026/Q2 net income and EPS dropped sharply YoY (net income -213%, EPS -204.6%), which can weigh on confidence even if influenced by one-time items/comps.
Free cash flow quality concerns were explicitly raised (Goldman noted AAR does not generate meaningful free cash flow), which matters for long-term compounding.
Near-term technical location: price is just under resistance (~107.2); failure to break can trigger a pullback toward ~103.
Financial Performance
Latest reported quarter: FY2026/Q2. Revenue rose to ~$795.3M (+15.92% YoY), showing strong demand and/or acquisition contribution. Gross margin improved to ~19.73% (+5.28% YoY), a constructive trend. However, net income fell to ~$34.6M (-213.07% YoY) and EPS fell to $0.91 (-204.60% YoY), signaling that bottom-line performance is not matching sales growth (mix, integration costs, dilution, or tough comps). Overall: top-line growth is strong and margins improved, but earnings quality/consistency is the key issue to watch.
Growth
Profitability
Efficiency
Analyst Ratings and Price Target Trends
Recent trend is net-positive with multiple upward price target revisions and mostly bullish ratings: Truist reiterated Buy and raised targets (to $99 then $107), RBC reiterated Outperform and raised targets (to $90 then $105), and Jefferies initiated Buy ($100). The main counterweight is Goldman initiating at Neutral with a higher $121 target but highlighting below-peer growth/profitability and weak free cash flow. Wall Street ‘pros’ case: strong aftermarket fundamentals, growth boosted by portfolio expansion/acquisitions, and a path to margin improvement via synergies. ‘Cons’ case: weaker free cash flow profile, near-term margin pressure/dilution from acquisitions, and uneven bottom-line conversion despite revenue growth. Politicians/congress: no recent congress trading data available.
Wall Street analysts forecast AIR stock price to fall over the next 12 months. According to Wall Street analysts, the average 1-year price target for AIR is 101.25 USD with a low forecast of 93 USD and a high forecast of 107 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
5 Analyst Rating
Wall Street analysts forecast AIR stock price to fall over the next 12 months. According to Wall Street analysts, the average 1-year price target for AIR is 101.25 USD with a low forecast of 93 USD and a high forecast of 107 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
5 Buy
0 Hold
0 Sell
Strong Buy
Current: 106.670
Low
93
Averages
101.25
High
107
Current: 106.670
Low
93
Averages
101.25
High
107
Goldman Sachs
Neutral
initiated
$121
AI Analysis
2026-01-26
New
Reason
Goldman Sachs
Price Target
$121
AI Analysis
2026-01-26
New
initiated
Neutral
Reason
Goldman Sachs initiated coverage of AAR Corp. with a Neutral rating and $121 price target. AAR is a diversified aerospace aftermarket company that performs component repairs, distributes parts, and provides other supply chain services, the analyst tells investors in a research note. The firm says that while parts of the business have seen above-market organic growth, and the company's margins have improved in recent years, its total growth and profitability remain below the aerospace supplier average. In addition, AAR does not generate meaningful amounts of free cash flow, adds Goldman.
Truist
Michael Ciarmoli
Buy
maintain
$99 -> $107
2026-01-09
Reason
Truist
Michael Ciarmoli
Price Target
$99 -> $107
2026-01-09
maintain
Buy
Reason
Truist analyst Michael Ciarmoli raised the firm's price target on AAR Corp. to $107 from $99 and keeps a Buy rating on the shares. Despite a strong 2025, the Aerospace & Defense sector remains broadly bullish for 2026, with rising aircraft production and sustained aftermarket demand supporting both OE and AM segments, the analyst tells investors in a research note. Defense may see fewer catalysts, but recapitalization, geopolitical tensions, and replenishment needs should sustain demand, making stock selection critical amid elevated valuations, particularly for SMID defense tech names, the firm adds.
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