Strong Execution and 2027 Upside, but Balanced Risk/Reward; Maintain EW

After reporting 3Q26 earnings, LOAR was up ~4.7% vs. the S&P 500 down ~4.4%, as the company delivered a strong 3Q26 and 2027 guidance that exceeded consensus expectations on adj. EBITDA and adj. EPS. We view the initial 2027 guide as a floor, with management acknowledging conservatism embedded in its capacity and OEM build rate assumptions. We think LOAR's print provides a reassuring data point for our positive aftermarket view, with at least LDD% end-market growth in 2027 and bookings and customer discussions pointing to stronger demand than its conservative capacity assumptions suggest. New business wins, pricing ahead of inflation, productivity, and operating leverage provide visibility into further margin expansion, with acquisitions offering additional upside to guidance. We like LOAR's proprietary portfolio, durable organic growth, margin expansion potential, and greater torque from M&A, but see these attributes as largely priced in, leaving balanced risk/reward. We maintain our