AAR's Segment Secures a Contract for Mobility Solutions

AAR Corporation’s AIR Mobility Systems unit recently secured a contract from the Defense Logistics Agency Troop Support. The contract has a one-year base with four optional one-year renewals, giving it a potential value of up to $85 million.

Per the terms of the agreement, AAR’s Mobility Systems division will provide a range of shipping and storage containers, shelters and related accessories to support U.S. military operations.

Growth Prospects for AIR

Per the Market Research Future firm’s report, military forces around the world are focusing on modernization, which is creating a need for advanced support systems. New technologies such as Artificial Intelligence, robotics and smart sensors are being added to ground equipment to maintain and service complex assets. These factors are driving the growth of the Military and Defense Ground Support Equipment (GSE) market as it adapts to the evolving requirements of modern militaries. The report also forecasts a compound annual growth rate of 5.5% for the global Military & Defense GSE market during the 2023–2032 time period.

This growth is likely to benefit AAR Corp., a prominent contractor in the ground support equipment market. The company specializes in lightweight, durable and deployable logistics solutions, ranging from shelters to containerized systems, which align with the military’s modernization goals. With more than 30 years of experience supporting the U.S. Department of Defense, AAR is expected to benefit from rising demand and maintain a strong role in defense logistics.

Opportunities for Other Defense Stocks

Other defense companies are also advancing ground support and mobility systems to enhance military readiness.

BAE Systems BAESY: BAE Systems recently announced a partnership with GM Defense and NP Aerospace to form Team LionStrike. The group is competing for the U.K.’s Land Mobility Program, which will replace older military vehicles with new platforms designed for modern missions. This move highlights BAE Systems’ focus on advancing military ground mobility solutions.

BAESY’s long-term (three to five years) earnings growth rate is 14.4%. The Zacks Consensus Estimate for BAESY’s 2025 sales implies an improvement of 63.4% from the 2024 figure.

AeroVironment AVAV: In March 2025, AeroVironment’s subsidiary Telerob won a contract to provide 41 HT300 uncrewed ground vehicles to the German Armed Forces. These vehicles support explosive ordnance disposal and counter-IED missions, helping troops operate safely in difficult terrain. As advanced support equipment, they play a key role in ensuring readiness for high-risk operations.

The Zacks Consensus Estimate for AVAV’s fiscal 2026 sales indicates an increase of 144.3% from the year-earlier level. The Zacks Consensus Estimate for AVAV’s fiscal 2027 earnings indicates an increase of 40.9% from the year-earlier level.

Teledyne Technologies TDY: In September 2024, Teledyne’s unit, Teledyne FLIR Defense, won two contracts worth up to $47 million from the U.S. Army to support its range of ground robots, including the MTRS, CRS-H, FirstLook, PackBot and Kobra. This reinforces its role as a key provider of unmanned ground support systems.

TDY’s long-term earnings growth rate is 10.1%. The Zacks Consensus Estimate for TDY’s 2025 sales indicates an increase of 6.7% from the year-earlier level.

AIR Stock Price Movement

Shares of AIR have gained 15.3% in the past three months compared with the industry’s 2.3% growth.

AIR’s Zacks Rank

AIR currently carries a Zacks Rank #4 (Sell).

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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