Description

StandardAero: Initiation Of coverage – Its $60 Million Repurchase Is A Bold Signal Amid MRO Expansion!

StandardAero reported a robust start to 2026, marked by broad-based growth across its three primary end markets: commercial aerospace, business aviation, and military and helicopter sectors. The company recorded a 13.3% year-over-year organic revenue increase in the first quarter, driven by continued strong demand and expanded backlog. Adjusted EBITDA rose modestly by 2.5%, while adjusted earnings per share (EPS) grew 14% to $0.33 compared to the prior year. Despite adjusted EBITDA margin compression to 12.5% from 13.8% in the previous year due to several largely transitory factors, underlying operational performance appears stronger when excluding these items, with margins estimated above 14%. The margin compression in the quarter was attributed to four main factors: the ongoing learning curve associated with the ramp-up of LEAP and CFM56 DFW growth programs; an accelerated burn-down of low-margin inventory related to restructured commercial contracts; timing impacts on engine shipment mix; and nonrecurring costs from closing a military program. StandardAero anticipates a return to double-digit EBITDA growth starting in the second quarter, supported by margin expansion through productivity gains, improved mix, and elimination of pass-through materials.