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    Loar’s Expanded Undrawn Credit Capacity Might Change The Case For Investing In Loar Holdings (LOAR)

    Simply Wall St·12/11/2025 15:29:57
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    • On November 25, 2025, Loar Holdings Inc. amended its Credit Agreement, increasing its delayed draw term loan commitment by US$175.0 million to US$275.0 million and extending the availability period through September 30, 2026, leaving the full US$275.0 million still undrawn as of that date.
    • This expanded and extended loan capacity, together with fresh analyst coverage positioning Loar as a high-quality aerospace aftermarket M&A compounder, enhances the company’s financial flexibility to pursue its acquisition-led growth agenda.
    • We’ll now examine how Loar’s enlarged US$275.0 million delayed draw loan capacity could reshape its acquisition-driven investment narrative and risk profile.

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    Loar Holdings Investment Narrative Recap

    To own Loar, you need to believe in its acquisition driven aerospace aftermarket focus and its ability to integrate bolt on deals without eroding margins or balance sheet strength. The expanded US$275.0 million delayed draw term loan increases near term firepower for M&A but does not fundamentally change the key short term catalyst, which remains successful execution on recent acquisitions, or the biggest risk, which is integration and regulatory friction around future deals.

    Among recent developments, the August 2024 US$360.0 million incremental term loan to fund the Applied Avionics acquisition ties directly to this new undrawn credit capacity, together defining how Loar finances and absorbs sizeable transactions. Together with strong recent earnings growth, these moves keep the acquisition flywheel turning, but also raise the importance of disciplined capital allocation and integration to support the longer term compounding story.

    However, investors also need to be aware that if acquisition integration stumbles or regulators slow approvals, the combination of higher leverage and concentrated aerospace exposure could...

    Read the full narrative on Loar Holdings (it's free!)

    Loar Holdings' narrative projects $656.1 million revenue and $114.0 million earnings by 2028. This requires 13.2% yearly revenue growth and a roughly $69.6 million earnings increase from $44.4 million today.

    Uncover how Loar Holdings' forecasts yield a $95.36 fair value, a 40% upside to its current price.

    Exploring Other Perspectives

    LOAR 1-Year Stock Price Chart
    LOAR 1-Year Stock Price Chart

    Four Simply Wall St Community fair value estimates span roughly US$29.60 to US$116.62 per share, underscoring how differently individuals assess Loar. Against that dispersion, the enlarged US$275.0 million undrawn loan and reliance on successful bolt on acquisitions mean your view on acquisition execution risk could heavily shape your own expectations for the business.

    Explore 4 other fair value estimates on Loar Holdings - why the stock might be worth less than half the current price!

    Build Your Own Loar Holdings Narrative

    Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

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    This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.