Zacks Investment Research upgraded shares of AAR Corp. (AIR) from NEUTRAL to OUTPERFORM on September 27, 2012, with a target price of $19.00.
AAR Corp. reported a solid fiscal first quarter 2013 results with earnings per share of $0.45 surpassing the year-ago earnings by 10% and in line with the high-end of management's guidance range. Revenue jumped 13% on the back of strong commercial aviation services business. Based on strong sales growth, operational efficiency, enhanced product availability and increased management's FY13 earnings guidance, we upgrade our recommendation on AAR Corp. from neutral to Outperform. We believe that the company has a competitive advantage over its peers based on its market expertise and technical/financial capabilities. The company's strategic contract wins hold future potential. These positives more than offset concerns arising from stiff competition and overcapacity in the aerospace market, margin pressures on account of delayed aircraft availability, unscheduled maintenance inspections and high fuel prices, and inadequate debt financing, unfavorable aircraft lease agreement and currency fluctuations.
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