FBR Capital Reiterates Market Perform as AerCap Holdings (AER) Announces Share Repurchase Program
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FBR Capital reiterated a Market Perform rating and $40.00 price target on AerCap Holdings (NYSE: AER) following the company's announced $250M share repurchase program. FBR estimates that the repurchase program will benefit EPS by approximately $0.23/share annually.
Analyst Christopher Nolan commented, "On August 22, AER announced a new $250M share repurchase initiative that will run through December 31, 2016. This announcement follows AER’s current $250M repurchase initiative, which will expire on September 30, 2016, and a $400M repurchase program for 1H16. Although management has stated that it currently views share repurchases as a better risk/reward proposition than investing in new aircraft leases, we are cautious on the outlook for material share repurchases in 2017 as we expect AER will see expanding capex in 2H16 continuing through 2017. We view the share repurchase announcement as a positive; however, we are maintaining our Market Perform rating for AER as we believe additional 4Q16 repurchases are already priced into Street consensus estimates. Further, we remain cautious on the outlook for leasing revenues given that AER is targeting $1B in aircraft sales in 2H16 and we expect softening industry lease rates overall in 2017."
Shares of AerCap Holdings closed at $38.74 yesterday.
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