AAR Corp.

AI-generated fair value estimate for this company.

Method: 10-year DCF with an explicit 5-year recovery ramp in free cash flow ($110M, $130M, $150M, $175M, $200M for fiscal years 1-5, reflecting margin normalization off a recently depressed base) then 5% annual FCF growth years 6-10; 9% discount rate; 3% terminal growth; $928M net debt; 39.39M diluted shares.

Reasoning: AAR's TTM free cash flow (about $33M) and 3-year average (about $14M) are depressed by heavy working-capital and integration capex tied to recent acquisitions, while revenue and net income are already recovering sharply (net income up roughly 1,400% year over year off a trough), so an explicit ramp to a normalized approximately 6% FCF margin is more representative than extrapolating the depressed recent actuals; the discount rate and $928M net debt reflect AAR's meaningfully levered balance sheet.