FBR Capital Sees Air Lease (AL) Weakness as Buying Opportunity - Reiterates Outperform

FBR Capital reiterated an Outperform rating and $51.00 price target on Air Lease Corp (NYSE: AL) saying that the decline in aircraft leasing stocks year-to-date presents a uniquely attractive buying opportunity for investors. Given bond spreads for aircraft leasing stocks are generally steady, FBR does not think that the share price decline is due to residual asset valuations or debt refinancing concerns.

Analyst Christopher Nolan commented, "We believe the decline in aircraft leasing stocks year-to-date presents a uniquely attractive buying opportunity for investors. That said, we reiterate our Outperform ratings for AerCap Holdings (AER) and Air Lease Corporation (AL). Year-to-date aircraft leasing stocks have declined 19% on average. This decline is materially more than what the beta of these stocks would imply, which indicates to us that factors other than a down market may be influencing share price action. Given bond spreads for aircraft leasing stocks are generally steady, we do not think the share price decline is due to residual asset valuations or debt refinancing concerns. We believe operational issues are steady given air traffic volumes remain strong and airline profitability solid. We hypothesize that it could be due to aircraft, as an investment class, not being broadly understood on the Street. As a result, we believe there is a lack of buyers as investors may be flocking to investment classes for which they are more comfortable with."

For an analyst ratings summary and ratings history on Air Lease Corp click here. For more ratings news on Air Lease Corp click here.

Shares of Air Lease Corp closed at $24.32 yesterday.

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