AAR Corp Dossier - Source-backed chat

AAR Corp

AIRNYSE

SectorIndustrials

IndustryAerospace & Defense

Beta (adjusted)1.09

Intrinsic Value $100.33median of 6 methods · middle span $69-$150based on filings through 31 May 2026

Market Price $101.47Price as of 30 Sep 2026

Near fair valueIntrinsic value is 1% below the market price

−50% · IV below pricenear fair value ±15%IV above price · +50%

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Market Cap $4.1B

Enterprise Value $4.9B

Shares Outstanding 38.4M diluted

Moat Rating None

Last ex-dividend27 Mar 2020

All prices and values are periodic snapshots, not live quotes. Source dates are shown for reference.

Thesis

Street consensus, scenarios, merits, risks, and invalidation triggers

AI-assisted

Thesis Summary

AAR CORP is a premier aviation aftermarket services provider uniquely positioned to capitalize on structural tailwinds in both commercial and defense aviation. The company is benefiting from an aging global commercial aircraft fleet—driven by prolonged OEM delivery backlogs from Boeing and Airbus—which accelerates demand for maintenance, repair, and overhaul (MRO) services and parts supply. Strategically, AAR is executing a high-margin portfolio transformation, shifting away from asset-heavy legacy commercial programs toward high-moat OEM parts distribution, digital software integration (via Trax), and high-growth government defense logistics contracts.

This section is the 12-month view: analyst targets and the probability-weighted scenarios built from them. The intrinsic value at the top of this page answers a different question: what the business is worth today.

Street view · analyst 12-month targets5 analysts · as of 18 Aug 2026

Low · most bearish analyst$128.00

Mean target$145.20

High · most bullish analyst$155.00

Street targets sit above today's price; our intrinsic value sits below it. Different horizons, different questions.

Our research · scenarios, merits, risks, and invalidation triggersResearch as of 18 Sep 2026

Scenarios · 12-month scenario targetsAnchored at research date

Bear CaseDownside scenario

$128.0020%

The bear case reflects potential headwinds from prolonged supply chain disruptions, extended OEM parts lead times, or a sudden macroeconomic slowdown that dampens global air traffic. Integration risks associated with recent acquisitions or higher-than-expected interest expenses on debt could also compress margins and limit free cash flow generation, holding the stock closer to its downside support levels.

Base CaseCentral scenario

$145.2050%

Matches the consensus mean

The base case assumes steady execution of the strategic realignment, with organic sales growth tracking at approximately 11% for FY2026. Commercial MRO demand remains robust due to the aging fleet, and the wind-down of the low-margin Legacy Commercial Programs proceeds as planned, supporting adjusted operating margins of 10.2% to 10.5% and steady progress toward the consensus price target.

Bull CaseUpside scenario

$155.0030%

The bull case is predicated on the New Parts Distribution segment continuing to deliver explosive organic growth (exceeding 30%) to offset near-term volatility in the Used Serviceable Material (USM) market. Additionally, rapid scaling of the newly expanded Oklahoma City MRO facility and accelerated integration of the HAECO acquisition will drive operating margins past 11%, while defense contract wins (such as the U.S. Air Force pallet contracts) scale faster than anticipated.

Scenarios are anchored to street consensus at the research date, with our probabilities and rationale.

Key Investment Merits

Sustained aftermarket upcycle driven by aircraft undersupply and aging global fleets.
Exclusive new parts distribution agreements with OEMs creating a highly defensible competitive moat.
Strategic realignment and wind-down of asset-heavy, low-margin Legacy Commercial Programs to unlock structural profitability.
Strong dual growth engines with accelerating commercial MRO demand and high-visibility government/defense contracts.

Key Investment Risks

Supply chain bottlenecks and extended lead times affecting parts availability and delivery schedules.
Integration risks and cost overruns associated with aggressive M&A and facility expansions.
Sensitivity to global air traffic volumes and potential defense budget reallocations.

Thesis Invalidation Triggers

A sharp decline in global commercial air travel demand leading to deferred airline MRO spending.
Failure to expand operating margins despite the wind-down of Legacy Commercial Programs.
Significant loss of market share or termination of key exclusive OEM distribution agreements.

All scenarios are estimates and subject to change. Past performance is not indicative of future results.

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Explore this dossier

ValuationIntrinsic value, the six-method breakdown, peer medians, and your assumptions sandbox.Financial SnapshotRevenue, profitability, returns, balance sheet, dividends, and the filing-level detail.Qualitative AnalysisBusiness overview, strategic initiatives, and mergers, acquisitions & partnerships.Outlook & Key DatesForward estimates, reporting calendar, and the monitoring framework.