Update shared on 27 Nov 2025
Analysts have raised their price target for AAON to $112 from $105. They cite expectations for strong performance in data center-related markets and improving fundamentals in the industrial efficiency sector.
Analyst Commentary
Recent coverage on AAON reflects a generally positive outlook among market observers. Analysts have highlighted both the company's strategic advantages and potential risks to monitor as AAON expands in key sectors.
Bullish Takeaways
- Bullish analysts note AAON's position as a differentiated innovator in HVAC and data center thermal management. They emphasize its strength in flexible, solutions-based manufacturing and advanced R&D.
- Improved fundamentals are anticipated as the company laps previous operational changes and moves past weaker results in non-residential markets.
- Operating leverage is expected to accelerate as AAON expands its data center footprint and executes growth initiatives over the next several years. This may result in industry-leading margins by FY27.
- Stocks with exposure to artificial intelligence infrastructure buildout, including AAON, have outperformed broader industrial peers. This trend suggests continued growth momentum in this segment.
Bearish Takeaways
- Analysts remain cautious about weaker trends in residential and traditional construction markets, which may lag performance in high-growth verticals.
- Execution risks are present as AAON scales its operations and manages ongoing transformational growth projects, especially through FY25 to FY27.
- Market observers highlight that near-term results may remain dependent on broader improvements in industrial efficiency demand and successful adaptation to operational changes.
What's in the News
- Jehoshaphat Research published a short report on AAON, claiming that data center cooling projects have lower gross margins than reported and forecasting over 30% downside to earnings due to revenue and margin risks (Periodical).
- AAON has raised its earnings guidance for the full year 2025 and now projects year-over-year sales growth in the mid teens rather than the low teens (Key Development).
- The company provided new guidance for Q4 2025, expecting double-digit revenue growth, supported by production recovery and earlier pricing actions (Key Development).
- From July to September 2025, AAON completed a buyback tranche, repurchasing over 1,600 shares and marking a total buyback of nearly 14.6% of shares since 2010 (Key Development).
Valuation Changes
- Fair Value remains unchanged at $115.25 per share according to updated analysis.
- Discount Rate has fallen slightly from 8.41% to approximately 8.39%.
- Revenue Growth projection is stable and holds at 16.60%.
- Net Profit Margin is unchanged, with estimates still at 14.87%.
- Future P/E ratio has decreased modestly from 38.84x to 38.35x.
Disclaimer
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