AIR Should I Buy
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AAR Corp (AIR) is not a strong buy for a beginner, long-term investor at this moment. Despite positive analyst ratings and strong revenue growth, the recent significant price drop (-6.50% in the regular market) and declining net income and EPS suggest caution. The technical indicators are neutral, and there are no strong trading signals or significant positive catalysts to justify immediate action. Holding or waiting for further clarity is recommended.
The MACD is positive and expanding, indicating a potential upward trend. RSI is neutral at 53.296, and moving averages are converging, showing no clear direction. Key support is at 100.84, and resistance is at 119.016. The stock is currently trading near its pivot point of 109.928.
Analysts have raised price targets significantly, citing strong revenue growth, improved margins, and robust performance in both commercial and government sales. FY2026 sales forecast has been increased, and the company reported a 25% YoY increase in total sales.
The stock dropped -6.50% in the regular market, and an insider (CEO John Holmes) plans to sell 60,000 shares, which may indicate a lack of confidence in near-term price appreciation. Net income and EPS have dropped significantly (-864.04% and -788.00% YoY, respectively), and gross margin has declined by 5.72% YoY.
In Q3 2026, revenue increased by 24.61% YoY to $845.1 million, reflecting strong sales growth. However, net income dropped significantly to $68 million (-864.04% YoY), and EPS fell to 1.72 (-788.00% YoY). Gross margin also declined to 18.31% (-5.72% YoY), indicating potential profitability challenges.
Analysts are broadly positive, with multiple firms raising price targets. Jefferies raised the target to $150, RBC to $125, and KeyBanc to $120, all maintaining Buy or Outperform ratings. However, Goldman Sachs initiated coverage with a Neutral rating, citing below-average growth and profitability compared to peers.
