StandardAero's Core Market Strength, Productivity Gains Drive Outlook, RBC Capital Markets Says

MT Newswires Live08-08 01:30

StandardAero's (SARO) raised full-year outlook is driven by core market strength, pricing, productivity gains, and progress on LEAP and CFM56 engine programs, RBC Capital Markets said in a note Friday.

The company on Thursday increased its 2026 revenue and adjusted EBITDA outlook by $50 million and $7.5 million, while earnings per share was raised to $1.54 at the midpoint from $1.45 previously.

The investment firm said the LEAP and CFM56 engine programs reached profitability in Q2 on account of improved throughput, expanded repair capabilities, and continued program scaling.

Management expects $1 billion in annual revenue for LEAP by the end of the decade, with several billion dollars of revenue by the mid-2030s, according to the note.

The firm also said it believes that capital allocation can be a catalyst for the company as it looks for more accretive mergers and acquisitions, and continues to repurchase shares.

RBC maintained its outperform rating on the stock, and price target of $34.

Shares of StandardAero were down 3.8% in Friday trading.

Price: 28.87, Change: -1.14, Percent Change: -3.78

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