FBR Capital Downgrades Aircastle Limited (AYR) to Market Perform
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FBR Capital downgraded Aircastle Limited (NYSE: AYR) from Outperform to Market Perform with a price target of $23.00 (from $24.00).
Analyst Christopher Nolan commented, "We are downgrading our investment rating for AYR to Market Perform from Outperform, lowering our price target to $23 from $24, and lowering our forward EPS estimates. Our downgrade reflects lower-than-expected 2Q16 adjusted EPS, AYR shares' premium price/book valuation relative to the peer average, and AYR’s forward exposure to weakening values for older widebody aircraft. Results for 2Q16 were affected by asset impairment charges related to such aircraft following AYR’s annual widebody fleet review. Looking ahead, we believe further impairment charges are possible given our view that secondary market valuations of older widebody aircraft in general will likely remain under pressure. More positively, we believe AYR shares have downside price support in the current market environment given the 4% yielding dividend and AYR's relatively small aircraft order book. Since early February, when we upgraded AYR to Outperform, the shares have generated a 31% total return versus 17% for the S&P 500 Index."
Shares of Aircastle Limited closed at $21.63 yesterday.
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