AAR Corp.’s AIR strong presence in the aerospace maintenance, repair and overhaul (MRO) market, rising earnings estimates and low debt act as a tailwind for the company. Given its growth prospects, AIR makes for a solid investment option in the Zacks Aerospace Defense Equipment industry.

Let’s focus on the factors that make this Zacks Rank #2 (Buy) company a strong investment pick at the moment.

AIR’s Growth Projections & Surprise History
 

The Zacks Consensus Estimate for AAR’s fiscal 2025 and 2026 earnings per share (EPS) has increased 0.5% and 0.6%, respectively, over the past 60 days.

The Zacks Consensus Estimate for its fiscal 2025 revenues is pegged at $2.77 billion, which implies a rise of 19.5% from the fiscal 2024 expected sales figure. The Zacks Consensus Estimate for its fiscal 2026 revenues is pegged at $2.96 billion, which indicates an increase of 6.8%.

The company delivered an average earnings surprise of 3.90% in the last four quarters.

AIR’s Debt Position
 

Currently, AAR’s total debt to capital is 45.51%, better than the industry’s average of 53.48%.

AIR’s times interest earned ratio (TIE) at the end of the second quarter of fiscal 2025 was 1.5. The TIE ratio of more than 1 indicates that the company will be able to meet its interest payment obligations in the near term without any problems.

AIR’s Liquidity
 

AIR’s current ratio at the end of the second quarter of fiscal 2025 was 2.68, higher than the industry’s average of 1.74. The ratio, being greater than one, indicates AAR’s ability to meet its future short-term liabilities without difficulties.

AIR’s Expansion Focus on the MRO Market
 

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

In March 2025, AIR inked a multi-year deal to offer Cebu Pacific Air nacelle MRO services for the airline's A320 fleet in Thailand. In December 2024, the company also formed a joint venture with Air France Industries KLM Engineering & Maintenance in the Asia-Pacific region to perform next-generation nacelle MRO services, such as on-wing/on-site inspections, and ensure extensive part availability for their esteemed clients.

These initiatives enhance AAR's global MRO capabilities, expanding its service offerings, strengthening its regional presence and creating strategic partnerships.

AIR Stock Price Performance
 

In the past three months, AIR shares have rallied 12.1% compared with the industry’s growth of 3.3%.

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Other Stocks to Consider
 

A few other top-ranked stocks from the same industry are Leonardo DRS, Inc. DRS, Mercury Systems MRCY and TransDigm Group Inc. TDG, each carrying a Zacks Rank #2 at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

DRS’ long-term (three to five years) earnings growth rate is pegged at 14.6%. The Zacks Consensus Estimate for the company’s total revenues for 2025 stands at $3.5 billion, which indicates year-over-year growth of 8.4%.

Mercury Systems’ long-term earnings growth rate is 13.2%. The Zacks Consensus Estimate for MRCY’s fiscal 2025 sales is pegged at $878.8 million, which implies an improvement of 5.2% from the fiscal 2024 reported figure.

TransDigm Group’s earnings growth rate is pegged at 13.5%. The Zacks Consensus Estimate for the company’s total revenues for fiscal 2025 is pegged at $8.87 billion, which indicates year-over-year growth of 11.7%.

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AAR Corp. (AIR) : Free Stock Analysis Report

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This article originally published on Zacks Investment Research (zacks.com).

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