AIR Recommendation Lowered
We downgrade our rating on AAR Corp. (AIR) that provides goods and services to both the domestic commercial airlines and the military services from Buy to Hold. This is in consideration of the dismal outlook for the domestic airline industry & the political uncertainties regarding defense expenditures.
On the commercial side, demand for AIR's offerings increases with the expansion and aging of fleet. With these growing requirements, airlines outsource more maintenance, repair and overhaul work.
For defense, AIR designs and manufactures mobility products, aircraft internal cargo loading/unloading systems and composite structures. AIR is expected to report its results for fiscal year 2008 sometime during the second week of July 2008.
The Street average estimates for Q4-08 are an EPS of $0.51 and sales worth $372.69 million. On the other hand, the Street average estimates for F/Y 2008 are EPS of $1.76 and a total of sales worth $1.37 billion. Finally, going forward, the Street average estimates for F/Y 2009 stands at an EPS of $2.20 and sales worth of $1.58 billion
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