- Price
- $20.99
- Fair value
- $42.40
- Discount
- 50.5%
- Uncertainty
- Medium
- LSEG rating
- 2.00
- Moat
- Narrow
- Next earnings
- 2026-11-05
- Next earnings is estimate
- Yes
- Company name
- StandardAero
- Sector
- Aerospace engine maintenance
- About
- StandardAero, Inc. is a large independent company that repairs and overhauls aircraft engines. It is based in Scottsdale, Arizona, and its shares have traded on the NYSE since its IPO in October 2024. It has two segments. Engine Services overhauls whole engines for airlines, lessors, business jet owners and the military, on engines such as the CFM56, the LEAP and the Pratt & Whitney PT6A. Component Repair Services repairs engine parts, and it has higher margins. StandardAero needs licenses from the engine makers for much of its work, and it makes money from the labor, parts and materials of each shop visit. For 2026, it expects revenue of $6,375 million to $6,500 million and adjusted EBITDA of $885 million to $910 million. Funds of The Carlyle Group still own a large part of the shares.
- Thesis
- The market prices StandardAero for the risk that its growth slows when its customers have less money. The stock fell by more than a quarter from early August to mid-October 2026, while oil prices stayed high. Investors fear that high jet fuel costs make airlines fly less and delay engine overhauls, although management said on August 6, 2026 that airlines still pass the cost on in ticket prices. The leaders also change. Paul McElhinney replaced Russell Ford as CEO on October 1, 2026, and the COO left her role on September 28, 2026. Net debt was 2.6 times adjusted EBITDA at June 30, 2026, and Carlyle can sell more shares. For the gap to close, four things must be true. Commercial aerospace revenue must keep growing, after the effect of the removed pass-through revenue, in line with the full-year guidance. The adjusted EBITDA margin must stay near the record 14.4% of Q2 2026, as the LEAP and CFM56 programs earn a profit. Free cash flow must reach the guidance of $270 million to $300 million of adjusted free cash flow for 2026. Net debt must keep falling toward 2 times EBITDA. The first test is the Q3 2026 report, expected in early November 2026, and the FY 2026 report and the new CEO's 2027 guidance come in about February 2027. If airline demand holds, the gap can close over the next three to five quarters.
- Risks
- Airlines can fly less or delay engine overhauls if jet fuel prices stay high or the economy weakens. Commercial aerospace is the largest end market of StandardAero. Management said in August 2026 that about 40% of the business does not depend on jet fuel prices.
A new CEO took over on October 1, 2026, and the COO left her role in September 2026. A change of leaders can change the plan or slow execution.
StandardAero needs licenses and parts from engine makers such as CFM, GE and Pratt & Whitney. Engine makers also compete in repair, and late parts can slow shop visits and tie up cash in engines that wait for parts.
Debt was $2,355 million at June 30, 2026, mostly floating-rate term loans. Free cash flow was weak in Q1 2026. Higher rates or a fall in profit can slow debt reduction.
Carlyle funds still own a large part of the shares, and sales by large holders, such as the 50 million share offering of January 2026, can weigh on the price.
- Balance sheet
- Cash: $179M
Debt: $2.4B
Net debt: $2.2B
EBITDA, last 12 months: $838M
Net debt / EBITDA: 2.6× (medium)
Interest cover: 3.9×
Undrawn credit line: $614M, to October 2029
Debt due within 12 months: $23M
Last debt due: 2031
Ratings: Moody's Ba2, S&P BB
StandardAero funds itself with senior secured term loans and a revolving credit facility. At June 30, 2026, the term loans were $2,216 million, due October 31, 2031, at SOFR plus 2.00%. The revolving credit facility had $120 million drawn, and it ends on October 31, 2029. Debt also includes $18 million of finance leases. Operating lease liabilities of $238 million are not in debt. Interest swaps and caps hedge part of the floating rate. EBITDA is adjusted EBITDA for the 12 months to June 2026, and net debt was 2.6 times this amount, down from 3.0 times a year earlier. Interest cover is operating income divided by interest expense for H1 2026. Moody's raised its rating in May 2026 and S&P raised its rating in June 2026. Under a $450 million buyback program of December 2025, StandardAero bought shares from GIC in January 2026 and in the open market in Q1 2026.
As of 2026-06-30.
- Checkpoints
- Nov 5, 2026 (estimate): Q3 2026 results: airline demand and margin. Pending. Watch: Commercial aerospace growth in line with the full-year guidance, an adjusted EBITDA margin near 14% and the 2026 guidance kept or raised pass; a guidance cut or a sign that airlines delay overhauls fails.
Feb 2027 (estimate): FY 2026 results and first guidance of the new CEO. Pending. Watch: Adjusted free cash flow of $270 million to $300 million for 2026 and 2027 guidance for double-digit earnings growth pass; weaker cash flow or lower growth targets fail.
Q2 2027 (estimate): Net debt toward 2 times EBITDA. Pending. Watch: Net debt below 2.5 times adjusted EBITDA by mid-2027 passes; leverage that stays at 2.6 times or rises fails.
- Recent events
- 2026-10-06: StandardAero won a predictive engine maintenance contract for the US Air Force F100-220 engine program. The company did not give the value.
2026-09-28: StandardAero said that Kimberly Ernzen no longer serves as Chief Operating Officer. She will stay with the company until December 31, 2026, to support the leadership transition.
2026-08-06: StandardAero reported Q2 2026 results. Revenue rose 4.6% to $1,599.7 million, and adjusted EBITDA rose 12.3% to $229.9 million, a record margin of 14.4%. The removal of low-margin material pass-through revenue held back revenue growth. Free cash flow was $50.2 million. StandardAero signed a license agreement with a key engine maker and raised its 2026 guidance for revenue, adjusted EBITDA and adjusted EPS.
2026-06-17: StandardAero said that S&P raised its issuer credit rating to BB from BB-.
2026-06-02: StandardAero said that Paul McElhinney, its Lead Independent Director, becomes CEO on October 1, 2026. Russell Ford retires as CEO on that date and stays Executive Chairman until December 31, 2026.
2026-05-20: StandardAero said that Moody's raised its corporate family rating to Ba2 from Ba3.
2026-05-07: StandardAero reported Q1 2026 results. Revenue rose 13.3% to $1,626.9 million, and adjusted EBITDA rose 2.5% to $203.2 million. Free cash flow was negative $133.7 million. It bought about 2.0 million of its own shares for $60.1 million, raised its 2026 guidance and announced the purchase of Unified Turbines, a repair shop for turboprop engine parts.