AAR Corp. vs. TAT Technologies: Which Stock to Buy in 2026?

The global aerospace services market continues to expand in 2026, supported by strong air travel demand, higher aircraft utilization and sustained growth in the Maintenance, Repair and Overhaul market. Airlines, cargo operators and defense agencies remain focused on fleet readiness and operational efficiency, creating steady opportunities for service providers such as TAT Technologies TATT and AAR Corp. AIR.

TAT Technologies brings specialized expertise in thermal management systems, auxiliary power units and component MRO services. AAR benefits from a broader and more diversified model that includes MRO services, supply-chain solutions and logistics support. As maintenance requirements remain elevated across commercial and defense aviation, both companies are positioned to benefit from favorable industry conditions. In this article, we compare their business strengths, financial performance and key risks to assess which stock may offer better value in 2026.

Tailwinds for AIR

AIR’s recent performance has been driven by strong quarterly results and continued investments in operations and technology, which have supported investor confidence. In January 2026, the company reported second-quarter fiscal 2026 results with revenue growth of 16% and a 31% increase in adjusted net earnings compared with the prior-year period.

AIR is further strengthening its market presence through facility expansion and ongoing technology initiatives. The company recently completed the expansion of its Airframe MRO facility in Oklahoma City, increasing capacity to address rising demand from commercial and government customers, as well as MRO providers and OEMs. The additional capacity is expected to enhance service capabilities and support long-term revenue growth.

The company is also witnessing solid momentum in its Trax business. Trax extended a multi-year agreement with Air Atlanta Icelandic. After upgrading to the eMRO platform in 2024, the airline will now implement eMobility and cloud hosting solutions. These enhancements are expected to improve maintenance processes, increase operational efficiency and strengthen regulatory compliance, reinforcing AIR’s technology offerings and recurring revenue stream.

Tailwinds for TATT

TATT continues to strengthen its order book with new contract wins. In January 2026, the company signed a three-year agreement worth approximately $14 million with a U.S. based commercial airline to provide landing gear MRO services for its Embraer E 170 and E 175 fleet. The contract includes a one-year extension option that could raise the total value to about $19 million.

The work will be performed at TATT’s Greensboro, North Carolina, facility and aligns with the expected rise in overhaul activity as the E 170 and E 175 fleet enters the early stage of their scheduled maintenance cycle. The agreement supports TATT’s operating plans and reflects steady demand for landing gear MRO services.

How do Estimates Compare for AIR & TATT?

The Zacks Consensus Estimate for AIR’s fiscal 2026 sales implies a year-over-year improvement of 15.2%, while that for its earnings per share implies a solid improvement of 24%. The stock’s near-term bottom-line estimates have moved north over the past 60 days.

The consensus estimate for TATT’s 2026 sales indicates a surge of 17.8% from the year-ago quarter’s estimated figure, while that for its earnings per share also implies a solid improvement of 30.2%. The stock’s near-term bottom-line estimates have remained constant over the past 60 days.

Stock Price Performance: AIR vs. TATT

AIR has outperformed TATT over the past six months. Shares of AIR have gained 54.4% compared with TATT’s growth of 48.3%.

Valuation of AIR More Attractive Than TATT

AIR is trading at a trailing 12-month Price/Book of 2.97X, below TATT’s trailing 12-month Price/Book of 4.04X.

Surprise History

AIR delivered an average earnings surprise of 11.26% in the last four quarters, while TATT delivered an average negative earnings surprise of 2.03% in the last four quarters.

Conclusion

Rising global air traffic, a growing aircraft fleet and steady demand for MRO and aerospace services are likely to support continued growth for both TAT Technologies and AAR in 2026.

Although both companies expect solid revenue and earnings growth, AAR currently shows a stronger overall position. The company has delivered consistent earnings surprises, seen upward revisions in its estimates and outperformed TATT in stock price gains over the past six months. AIR also trades at a more attractive valuation based on price to book compared with TATT.

TAT Technologies remains supported by steady contract wins and healthy growth projections. However, given AIR’s diversified business model, better earnings track record and relatively lower valuation, it appears to be the more attractive investment choice in the aerospace services sector for 2026.

AIR currently carries a Zacks Rank #2 (Buy) at present, while TATT has a Zacks Rank #3 (Hold). 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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