UPDATE: Auriga Raises PT to $22 on AAR Corporation

Auriga increases its price target to $22 on Hold-rated AAR Corporation

on margin pressure that offset stronger outlook on revenue. Auriga says, "AAR reported third-quarter operating results behind expectations, although headline EPS of $0.50 came in $0.02 ahead of consensus on a $0.09 tax benefit. Softness in the quarter stemmed entirely from weaker-than-expected margin performance, as top-line results showed a 16.6% year-over-year improvement. Although we believe a turnaround warrants close attention over the next few quarters, the combination of near-term margin pressure and weak long-term defense visibility keep us on the sidelines. That said, we are adjusting our price target to $22 (from $20), which reflects a 10x multiple of our FY13 estimate of $2.15." AIR closed at $20.17 a share on Wednesday.