AlphaMadera's AlphaVal page classifies AAR Corp. as a Cyclical & Capital-Intensive business and values it using Normalized Earnings × Cycle Multiple, then compares the result to the current market price to flag AIR as undervalued, fairly valued, or overvalued.

What is AAR Corp.'s fair value?

Fair value for AIR comes from a Normalized Earnings × Cycle Multiple model -- the approach AlphaVal selected for this company's Cyclical & Capital-Intensive classification. The live AlphaVal page shows bear, base, and bull scenarios alongside the key assumption behind each.

How does AlphaMadera value AIR?

AlphaVal routes each company to one of ten valuation archetypes based on its business model. AIR was classified as Cyclical & Capital-Intensive and is valued using Normalized Earnings × Cycle Multiple, built from AIR's most recent reported fundamentals.

AIR - AAR Corp.

Price: -- -- | CONSENSUS: Buy DETAILS | PRICE TARGET: $144.00 DETAILS

AlphaVal

Deterministic, archetype-aware fair value

Cyclical & Capital-Intensive 80% confidence

Primary model: Normalized Earnings × Cycle Multiple

Valuation Signal Overvalued Strong

Trading 160.7% above fair value

Current Price $123.87

Bear Case $38.88 68.6% downside ($38.88 - $123.87) / $123.87 = -68.6% $2.16 × 18x

Fair Value $47.52 61.6% downside ($47.52 - $123.87) / $123.87 = -61.6% $2.16 × 22x

Bull Case $56.16 54.7% downside ($56.16 - $123.87) / $123.87 = -54.7% $2.16 × 26x

Adjust Assumptions

Cycle P/E Multiple

22.0x

Normalized EPS

2.16$

Key Value Driver

Through-cycle normalized EPS ($2.16)

Terminal Value % of EV

Implied Market Multiple 57.3x

Market is pricing in (growth)

Plain-Language Summary

Using 7-year normalized EPS of $2.16 at a 22x cycle multiple, the base-case value is $47.52 per share. P/TBV cross-check: 5.9x.

Analyst Consensus (External Reference)

Never blended into the bear/base/bull estimates above -- shown only as an outside comparison.

Average Target (20 analysts) $144.00

Analyst Range $132.00 – $155.00

Divergence from AlphaVal 67%

Warnings

⚠ This company has a built-in lending arm whose debt is mixed in with the main business. We capped the debt adjustment to avoid overstating what the core business owes.

⚠ Recent profits ($4.89/share) are 126% above the mid-cycle average ($2.16). Buying based on peak profits is the most common mistake with boom-and-bust businesses.

⚠ Price-to-book value of 5.9x is above the normal range for this type of business (0.7x-2.0x). The stock may already price in a strong cycle.

ℹ Wall Street's average price target is $144.00 (from 20 analysts). Our estimate is 67% below the consensus -- consider that gap carefully.

Key Risks

Standard 10-year DCF produces unreliable terminal values for cyclicals
'Cheap' P/E at cycle peak is the most common value trap — normalize first
Captive finance subsidiaries have different risk profiles from manufacturing