AAR Corp.’s AIR strong presence in the aerospace Maintenance, Repair and Overhaul ("MRO") market, solid liquidity and low debt are positives. Given its growth prospects, AIR makes for a solid investment option in the Aerospace sector.
 
Let’s focus on the factors that make this Zacks Rank #2 (Buy) company a strong investment pick at the moment.

Growth Projections & Surprise History of AIR

The Zacks Consensus Estimate for fiscal 2025 earnings per share is pegged at $3.63, which indicates year-over-year growth of 9%.

The consensus estimate for fiscal 2025 sales is pinned at $2.70 billion, which indicates year-over-year growth of 16.4%.

AIR delivered an average earnings surprise of 1.80% for the trailing four quarters.

AAR’s Debt Position

Currently, the company’s total debt to capital is 44.77%, better than the industry’s average of 55.52%.

AIR’s times interest earned (TIE) ratio at the end of the first quarter of fiscal 2025 was 2.61. A TIE ratio of more than one indicates that the company will be able to meet its interest payment obligations in the near term without any difficulties.

AIR’s Liquidity

AIR’s current ratio at the end of the fiscal first quarter was 3.06. A current ratio of greater than one indicates the company’s ability to meet its future short-term liabilities without difficulties.

AIR’s Focus on the MRO Market

The commercial aerospace industry has been witnessing a solid increase in the utilization of existing aircraft, which, in turn, has been driving the demand for aircraft maintenance. To reap the benefits of the growing MRO prospects, AAR has been making notable efforts. The company broke ground on additional hangars in Miami, FL, and Oklahoma City, OK, in March and April of 2024, respectively. These larger capacity hangers will increase AAR’s existing footprint through increased efficiency and improved throughput.

Additionally, the company completed the $725 million purchase of Triumph Group, Inc.'s Product Support Business in March 2024. The Product Support Business is a top global supplier of specialist MRO capabilities for structural components, engine and airframe accessories, interior refurbishing, wheels and brakes and other essential aircraft components for the commercial and defense industries.

AIR Stock’s Price Performance

Shares of AIR have risen 13.9% in the past month compared with the industry’s 4.2% growth.

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Other Stocks to Consider

 A few other top-ranked stocks from the same industry are Bae Systems BAESY, Curtiss-Wright Corporation CW and Heico HEI, each carrying a Zacks Rank of 2 at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Bae Systems’ long-term (three to five years) earnings growth rate is 12.4%. The Zacks Consensus Estimate for BAESY’s 2024 sales is pinned at $36.22 billion, which indicates year-over-year growth of 37.7%.

Curtiss-Wright delivered an average earnings surprise of 12.78% for the trailing four quarters. The consensus estimate for CW’s 2024 sales is pinned at $3.08 billion, which indicates year-over-year growth of 8.3%.

Heico delivered an average earnings surprise of 12.23% for the trailing four quarters. The Zacks Consensus Estimate for HEI’s fiscal 2024 sales is pinned at $3.89 billion, which indicates year-over-year growth of 31.1%.

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AAR Corp. (AIR) : Free Stock Analysis Report

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