Jefferies raises Loar Holdings stock price target on growth outlook

Jefferies has increased its price target for Loar Holdings Inc (NYSE:LOAR) shares to $90 from $88, while keeping a Buy rating. The firm highlighted the company's growth outlook for 2027, projecting expansion across all end markets. Loar Holdings, an aerospace components manufacturer, anticipates growth in the aftermarket segment, even with flat market volumes, due to new contracts, pricing, and market share gains.

The company estimates a 12% organic growth in the aftermarket segment for 2027. Loar Holdings has achieved a 200 basis point annual margin expansion through M&A activity, with the most recent acquisition closing in January. The firm views these acquisitions as leading in the industry. The aerospace and defense supplier's gross profit margin of 53.6% over the past year has bolstered its optimistic outlook.

Despite trading above InvestingPro's Fair Value estimate, Loar Holdings demonstrates strong profitability metrics. In recent news, the company reported third-quarter revenue exceeding Wall Street expectations, with $176.17 million compared to the anticipated $137.5 million. Loar also announced adjusted earnings of $0.39 per share and a record 17th consecutive quarter of rising adjusted EBITDA.

The company's backlog is at record highs, and its backlog shows a book-to-bill ratio above 1.1 across end markets. Net organic sales increased by 16% year-over-year, driven by demand in commercial original equipment, aftermarket activity, and defense spending.