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AAR Poised to 'Materially Outperform' its Prior 3-Year Targets, RBC Says

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AAR (AIR) is poised to "materially outperform" its prior three-year targets initially provided in 2023, and confidence in the company's near-term outlook remains strong with the management reaffirming guidance for fiscal 2026, RBC Capital Market said in a Wednesday note.

According to the note, AAR's commentary at its 2026 investor day on its relationships with original equipment manufacturers and its ability to continue to take share was positive. The analysts said AAR's software suite provides a much more complete software solution for airline customers than in 2023.

Furthermore, the company's new three-year financial framework comprising of an adjusted sales compound annual growth rate of 6% to 10%, adjusted EBITDA margin expanding to 13%, adjusted earnings per share CAGR of about 15%, was "somewhat conservative," with upside to margins with growth in parts, software, maintenance services businesses, the note said.

RBC maintained its outperform rating with a $125 price target.

Price: $106.19, Change: $-5.32, Percent Change: -4.77%

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