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Here's Why You Should Add AAR Stock to Your Portfolio Right Now
AIRAAR(AIR) ZACKS·2024-11-29 14:01

Core Viewpoint - AAR Corp. (AIR) is positioned as a strong investment option in the aerospace sector due to its robust presence in the MRO market, solid liquidity, and low debt levels [1][2]. Financial Performance - The Zacks Consensus Estimate for fiscal 2025 earnings per share is 3.63,reflectingayearoveryeargrowthof93.63, reflecting a year-over-year growth of 9% [3]. - The consensus estimate for fiscal 2025 sales is 2.70 billion, indicating a year-over-year growth of 16.4% [3]. - AIR has delivered an average earnings surprise of 1.80% over the trailing four quarters [4]. Debt Position - AIR's total debt to capital ratio stands at 44.77%, which is better than the industry average of 55.52% [5]. - The times interest earned (TIE) ratio at the end of the first quarter of fiscal 2025 was 2.61, indicating the company can meet its interest payment obligations without difficulties [5]. Liquidity - AIR's current ratio at the end of the fiscal first quarter was 3.06, demonstrating the company's ability to meet future short-term liabilities [6]. MRO Market Focus - The commercial aerospace industry is experiencing increased aircraft utilization, driving demand for maintenance services [7]. - AAR has initiated the construction of additional hangars in Miami, FL, and Oklahoma City, OK, to enhance efficiency and throughput [7]. - The company completed a 725millionacquisitionofTriumphGroup,Inc.sProductSupportBusiness,whichprovidesessentialMROcapabilitiesforvariousaircraftcomponents[8].StockPerformanceAIRshareshaveincreasedby13.9725 million acquisition of Triumph Group, Inc.'s Product Support Business, which provides essential MRO capabilities for various aircraft components [8]. Stock Performance - AIR shares have increased by 13.9% in the past month, outperforming the industry's growth of 4.2% [9]. Other Stocks to Consider - Other top-ranked stocks in the aerospace industry include Bae Systems (BAESY), Curtiss-Wright Corporation (CW), and Heico (HEI), all currently holding a Zacks Rank of 2 [11]. - Bae Systems has a long-term earnings growth rate of 12.4%, with a consensus estimate for 2024 sales at 36.22 billion, indicating a year-over-year growth of 37.7% [11]. - Curtiss-Wright has an average earnings surprise of 12.78% and a consensus estimate for 2024 sales at 3.08billion,reflectingayearoveryeargrowthof8.33.08 billion, reflecting a year-over-year growth of 8.3% [12]. - Heico has an average earnings surprise of 12.23% and a consensus estimate for fiscal 2024 sales at 3.89 billion, indicating a year-over-year growth of 31.1% [12].