Loar Holdings Inc. Plunges 7.48% as Profit-Taking and Valuation Pressures Trigger Sell-Off

The share price fell to its lowest level since September 2025 today, with an intraday decline of 5.08%.

Loar Holdings Inc. (LOAR) has experienced a sharp correction after previously exceeding Wall Street’s expectations in the third quarter of 2025. The company reported adjusted earnings per share of $0.35, surpassing forecasts, and raised its 2025–2026 guidance. Despite these strong fundamentals, the stock has dropped 7.48% over two days, reflecting investor caution. Analysts attribute the pullback to a combination of profit-taking following a prior 6.5% surge post-earnings and concerns over a forward price-to-earnings ratio of 77x for 2026, which exceeds sector averages. The defense and aerospace supply chain segments, key growth drivers, remain resilient, but elevated valuation metrics have prompted a reassessment of risk-reward dynamics.

Loar’s strategic positioning in high-margin aerospace and defense markets, coupled with disciplined cost management, has historically supported its growth. However, the recent selloff highlights market sensitivity to macroeconomic uncertainties and valuation pressures. While the company’s backlog and exposure to secular trends like defense modernization provide a buffer, investors are scrutinizing its ability to sustain margin expansion amid rising input costs. Analysts remain optimistic, with a median 12-month price target of $96 implying a 23% upside, but near-term volatility is likely as the stock tests key support levels ahead of critical guidance updates in 2026.