Event context and recent performance

AAR (AIR) has been drawing attention after recent trading, with the stock last closing at $112.98. That level is accompanied by a one-month return of 7.5% and a three-month return of 43.1%.

While the 1 day share price return was slightly negative, the 30 day share price return of 7.5% and year to date share price return of 33.8%, alongside a 1 year total shareholder return of 74.3%, point to strong momentum building over the past year as investors reassess AAR’s growth potential and risk profile.

If this move in AAR has you thinking about where else capital could work hard, it might be a good moment to check out 23 top founder-led companies as potential new ideas.

With AAR trading around $112.98, slightly above the average analyst price target and showing strong recent returns, the key question is whether shares still offer value or if the market is already pricing in future growth.

Most Popular Narrative: 2.1% Overvalued

AAR's last close at $112.98 sits slightly above the most followed fair value estimate of about $110.67. The current price edges past that narrative line in the sand while still sitting close enough that the underlying assumptions really matter.

The commercialization of additional MRO capacity in Oklahoma City and Miami, both already sold out before opening, is described as positioning AAR to benefit from a projected long term rise in global air travel and the need for ongoing maintenance of aging aircraft fleets. This is presented as supporting stronger revenue and improved earnings visibility. AAR's reported growth in new parts Distribution (25%+ organic, significantly above market) is characterized as aligning with increasing demand for resilient supply chains and more diversified inventory management from both commercial and government customers, suggesting the possibility of continued revenue expansion and higher margins.

Want to see what sits behind that near sold out MRO capacity and parts growth story? The narrative emphasizes potential future revenue, margin changes, and a re rated earnings multiple, tied together by one discount rate driven cash flow path that you can review line by line.

Result: Fair Value of $110.67 (OVERVALUED)

However, this depends on commercial aviation remaining supportive and on AAR keeping pace with OEM and digital competition, which could pressure margins if those trends change.

Build Your Own AAR Narrative

If that fair value story does not quite match your view, or you would rather test the numbers yourself, you can build a custom AAR narrative in just a few minutes, starting with Do it your way.

A great starting point for your AAR research is our analysis highlighting 2 key rewards and 3 important warning signs that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.