Loar (LOAR) is confident in attaining around 10% organic growth in the "foreseeable future," with the Middle East conflict not having an impact on the company so far, RBC Capital Markets said in a Thursday note.
The company highlighted that its new-business pipeline is about $700 million, mostly tied to aero original equipment programs, and that even a modest 15% conversion would generate over 3% of organic growth, meeting its annual target, RBC analysts said. They noted that the 15% figure was conservative and expected more than 3% growth in the near term.
Loar raised its full-year 2026 revenue forecast by $5 million, driven by strong commercial original equipment and aftermarket performance and contributions from its recent acquisitions LMB and Harper Engineering, according to the note. The analysts believe the guidance is conservative and expect results at the top end of the guidance.
The analysts believe that the market is underestimating Loar's full upside in margin potential, and see the commentary at the company's earnings call as positive for investor sentiment.
RBC maintained the company's stock rating at outperform and lowered the price target to $80 from $90.
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