AAR Corp. (AIR) Hits Fresh High: Is There Still Room to Run?

Core Viewpoint - AAR's stock has shown strong performance, increasing by 18.8% over the past month and reaching a 52-week high of $98.92, with a year-to-date gain of 18.7% compared to the broader aerospace sector and defense equipment industry [1][2]. Financial Performance - AAR has consistently exceeded earnings expectations, reporting an EPS of $1.18 against a consensus estimate of $1.02 in its last earnings report [2]. - For the current fiscal year, AAR is projected to achieve earnings of $4.91 per share on revenues of $3.2 billion, reflecting a 25.83% increase in EPS and a 15.23% increase in revenues. The next fiscal year forecasts earnings of $5.8 per share on revenues of $3.41 billion, indicating year-over-year changes of 17.99% and 6.51%, respectively [3]. Valuation Metrics - AAR's current valuation metrics indicate a trading multiple of 20X current fiscal year EPS estimates, which is below the peer industry average of 36.2X. On a trailing cash flow basis, AAR trades at 18X compared to the peer group's average of 34.8X, suggesting it is not among the top value stocks [6]. Zacks Rank and Style Scores - AAR holds a Zacks Rank of 1 (Strong Buy) due to rising earnings estimates, which aligns with the recommendation for investors to select stocks with a Zacks Rank of 1 or 2 and Style Scores of A or B [7]. - The stock has a Value Score of C, while its Growth and Momentum Scores are both A, resulting in a combined VGM Score of A, indicating strong growth potential [6][7].