AAR Corp.
AIR
AAR Corp. is a global aviation aftermarket company serving commercial airlines and government customers. It sells aircraft parts, provides maintenance and repair services, offers engineering and aviation software, and runs government-focused logistics and mobility programs. The business is tied to keeping aircraft flying rather than to building new planes, which can make demand more resilient when fleets stay in service longer.
The company now reports four segments: Parts Supply, Repair, Engineering, and Software, Government Solutions, and Legacy Commercial Programs. Management is actively shifting the mix toward higher-margin, higher-return areas and is winding down Legacy Commercial Programs over roughly three to four years because it is more asset-heavy and no longer meets return thresholds. That portfolio cleanup matters because it should make the company simpler and potentially more profitable over time.
Recent strategy has been aggressive but coherent. In fiscal 2026, AAR completed acquisitions including ADI for $137.1 million, HAECO Americas for $78.0 million, ART for $36.0 million, and Aerostrat for $19.0 million. These deals expand distribution, heavy maintenance capacity, engineering certification capability, and software, which strengthens AAR’s position as an independent one-stop aviation services platform.
On valuation, the stock looks neither distressed nor euphoric. At $112.77, AIR trades at about 17.24x forward earnings and 23.25x trailing earnings, with EPS TTM of 4.85. The shares sit closer to the 52-week low of 74.25 than the high of 154.00, and below the 50-day average of 134.30, suggesting sentiment has cooled even though the long-term operating story still appears intact.
Business quality looks solid. AAR benefits from scale, a broad service set, exposure to both commercial and government aviation, and a growing software layer that can deepen customer relationships. The main challenge is execution: integrating acquisitions, improving margins, and successfully exiting the lower-return legacy program business without disrupting customer ties or absorbing too much capital.