Should I Buy AIR? AIR 2026 Analysis

Should You Buy AAR Corp (AIR) Today? Analysis, Price Targets, and 2026 Outlook.

Conclusion

Hold

Latest Price

113.090

1 Day change

5.82%

52 Week Range

113.650

Analysis Updated At

2026/02/04

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Not a good buy right now for an impatient investor: price is extended near resistance after a strong run, while momentum indicators are starting to fade.
Upside still exists longer-term (aftermarket/MRO demand, capacity expansion), but the near-term risk/reward is unfavorable at ~$109.9 given overbought conditions and recent profit/EPS deterioration.
Intellectia Proprietary Trading Signals
- AI Stock Picker: No signal on given stock today.
- SwingMax: No signal on given stock today.
Political / influential trading check: no recent congress trading data available; no notable politician activity indicated in provided data.

Technical Analysis

Trend: bullish structure (SMA_5 > SMA_20 > SMA_200) indicates the primary trend remains up.
Momentum: MACD histogram at -0.0232 (below zero) and only “negatively contracting” suggests upside momentum is weakening even as trend remains positive.
RSI(6) = 74.7: effectively overbought / stretched; risk of short-term pullback increases.
Levels: Pivot 106.53; price (~109.9) is above R1 (109.17) and approaching R2 (110.80) — upside looks crowded near-term; first meaningful support is around 106.5 then 103.9.

Options Data

Bullish

Open Interest Put-Call Ratio

Bullish

Option Volume Put-Call Ratio

Sentiment: Put/Call open interest 0.88 = slightly call-leaning positioning; Put/Call volume 0.11 = strongly call-dominant daily flow (bullish skew).
Activity: today’s volume (97) is ~81.5% of 30-day average (not a major spike); open interest ~110.5% of 30-day average (positioning a bit elevated).
Volatility: IV 30d 39.8 vs HV 35.6, and IV percentile 75.6 — options are relatively pricey, implying the market is pricing higher uncertainty; this can cap clean near-term upside for new buyers.

Technical Summary

Sell

Buy

Positive Catalysts

- Operational growth: expanded Oklahoma City MRO facility by 80,000+ sq ft and added 3 bays, signaling confidence in sustained MRO demand and potential revenue capacity expansion.
- Sector tailwinds: analysts cite rising aircraft production and sustained aftermarket demand supporting both OE and AM segments.
- Analyst support: multiple Buy/Outperform ratings (Truist, RBC, Jefferies) pointing to continued top-line momentum and longer-term margin opportunity post-integration.

Neutral/Negative Catalysts

- Legal/contract setback: U.S. Court of Federal Claims denied AAR’s protest vs the Air Force T-6 contract — removes a potential upside catalyst.
- Profitability headwind: latest quarter shows sharp YoY declines in net income and EPS, aligning with commentary that near-term margins may be pressured by acquisition dilution.
- Quality-of-earnings concern from coverage: Goldman notes AAR does not generate meaningful free cash flow, which can limit valuation expansion.

Financial Performance

Latest reported quarter: FY2026 Q2.
Revenue: $795.3M, +15.92% YoY (strong top-line growth).
Profitability: Net income $34.6M, -213.07% YoY; EPS $0.91, -204.60% YoY (material deterioration despite sales growth).
Margin: Gross margin 19.73%, +5.28% YoY (some operational improvement, but not flowing through to bottom-line yet, likely due to integration/other costs).

Growth

Profitability

Efficiency

Analyst Ratings and Price Target Trends

Recent trend: predominantly positive revisions into early Jan (Truist PT raised; RBC PT raised; Jefferies initiated Buy), followed by a more cautious tone with Goldman initiating Neutral at $121 (acknowledges improvements but flags lower profitability vs peers and weak FCF).
Current Street “pros”: strong aftermarket/MRO demand, acquisitions building a fuller-service portfolio, and an “encouraging” margin setup longer-term.
Current Street “cons”: near-term margin pressure from acquisition dilution/synergy execution, and skepticism around free cash flow generation.
Price targets vs price (~$109.9): GS $121 implies upside; several others cited around ~$100–$107/$105 are at or below current price, suggesting less obvious upside at today’s level.

5 Analyst Rating

Wall Street analysts forecast AIR stock price to fall over the next 12 months. According to Wall Street analysts, the average 1-year price target for AIR is 101.25 USD with a low forecast of 93 USD and a high forecast of 107 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.

5 Buy

0 Hold

0 Sell

Strong Buy

Current: 106.870

Low

Averages

101.25

High

107

Current: 106.870

Low

Averages

101.25

High

107

Goldman Sachs

Neutral

initiated

$121

AI Analysis

2026-01-26

Reason

Goldman Sachs

Price Target

$121

AI Analysis

2026-01-26

initiated

Neutral

Reason

Goldman Sachs initiated coverage of AAR Corp. with a Neutral rating and $121 price target. AAR is a diversified aerospace aftermarket company that performs component repairs, distributes parts, and provides other supply chain services, the analyst tells investors in a research note. The firm says that while parts of the business have seen above-market organic growth, and the company's margins have improved in recent years, its total growth and profitability remain below the aerospace supplier average. In addition, AAR does not generate meaningful amounts of free cash flow, adds Goldman.

Truist

Michael Ciarmoli

Buy

maintain

$99 -> $107

2026-01-09

Reason

Truist

Michael Ciarmoli

Price Target

$99 -> $107

2026-01-09

maintain

Buy

Reason

Truist analyst Michael Ciarmoli raised the firm's price target on AAR Corp. to $107 from $99 and keeps a Buy rating on the shares. Despite a strong 2025, the Aerospace & Defense sector remains broadly bullish for 2026, with rising aircraft production and sustained aftermarket demand supporting both OE and AM segments, the analyst tells investors in a research note. Defense may see fewer catalysts, but recapitalization, geopolitical tensions, and replenishment needs should sustain demand, making stock selection critical amid elevated valuations, particularly for SMID defense tech names, the firm adds.

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AIR Should I Buy

AIR Should I Buy

Should You Buy AAR Corp (AIR) Today? Analysis, Price Targets, and 2026 Outlook.

Technical Analysis

Options Data

Technical Summary

Positive Catalysts

Neutral/Negative Catalysts

Financial Performance

Growth

Profitability

Efficiency

Analyst Ratings and Price Target Trends

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