Oklo stock tumbles as Financial Times scrutinizes valuation
On Friday, RBC Capital Markets reaffirmed its positive stance on AAR Corporation (NYSE:AIR), maintaining both an Outperform stock rating and a $75.00 price target. The aerospace and defense contractor, currently valued at $2.4 billion, reported its fiscal third-quarter 2025 results, showcasing a 20% increase in revenue, approximately 6% of which was attributed to organic growth. The adjusted earnings per share (EPS) of $0.99 exceeded the consensus estimate of $0.96, while adjusted operating margins reached 9.7%, surpassing the anticipated 9.4%. According to InvestingPro data, the stock currently trades at $59.51, near its 52-week low of $54.71, suggesting potential value opportunity.
Despite revenue growth falling short of expectations, RBC Capital analysts highlighted AAR Corporation’s robust margin performance as a key factor reinforcing their confidence in the company’s financial outlook for fiscal year 2026. The company’s strong financial health is evidenced by its healthy current ratio of 2.68, indicating solid liquidity. The company’s management team expressed optimism, indicating that the risks associated with incremental airline capacity have not yet affected the business. InvestingPro analysis reveals 8 additional key insights about AAR’s financial health and growth prospects, available to subscribers.
The distribution segment of AAR Corporation was particularly noted as a strong point in the recent financial disclosures. However, the potential upside from DOGE—a reference to a project or segment not detailed in the context—remains uncertain according to the analysts.
RBC Capital’s reiteration of the Outperform rating and price target reflects their ongoing belief in the strength and potential of AAR Corporation’s business model and market position. The company’s ability to maintain higher-than-expected margins is seen as a positive indicator for the upcoming fiscal year, despite the revenue growth not meeting analysts’ prior forecasts.
In other recent news, AAR Corp reported its third-quarter financial results for fiscal year 2025, showcasing record sales of $678 million, marking a 20% year-over-year increase. Despite this achievement, revenue fell short of the expected $698.97 million, attributed to delays in engine inductions from a specific customer. Earnings per share (EPS) slightly surpassed expectations, reaching $0.99 compared to the forecast of $0.98. Benchmark analysts maintained their Buy rating on AAR Corp, citing the company’s strong adjusted EBITDA performance, although they noted the revenue shortfall. Truist Securities also maintained a Buy rating but adjusted the price target to $78 from $81, reflecting the mixed financial outcomes.
AAR Corp continues to anticipate growth in its Used Serviceable Material (USM) trading, with CEO John Holmes expressing optimism about ongoing demand. The company expects margin expansion driven by new parts distribution, Trax software wins, and maintenance efficiencies. Additionally, AAR Corp announced several new deals, including distribution agreements with Chromalloy and Unison, and the selection of its Trax software by Cathay Pacific. The company also plans to finalize the sale of its Landing Gear Overhaul business for $51 million in the fourth fiscal quarter of 2025, aligning with its strategic growth objectives.
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