Barclays on U.S. Airlines: Is The Market Mispricing Aircraft Leasing Companies? Closer Look At AYR, AER & AL
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Price: $32.01 --0%
Rating Summary:
5 Buy, 11 Hold, 2 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 8 | Down: 6 | New: 26
Rating Summary:
5 Buy, 11 Hold, 2 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 8 | Down: 6 | New: 26
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Barclays on U.S. Airlines: Is The Market Mispricing Aircraft Leasing Companies?
Analyst, David E. Fintzen, said, "We believe the market is potentially mispricing aircraft lessors as our analysis suggests a large valuation gap between Aircatle (NYSE: AYR) & AerCap (NYSE: AER) and Air Lease (NYSE: AL) persists. In our view, this disconnect is largely a function of AL's rapid growth potential and the perception of low or no growth at AYR and AER (a perception that we disagree with). Moreover, we believe that markets do in fact pay for income as well as growth. While AYR provides the income potential as well as growth (after adjusting for certain accounting policies discussed in this note), the stock trades well below where our regression analysis of Russell 2000 companies would suggest. We continue to see value in the aircraft leasing space, with a preference for AYR followed by AER. We also see upside potential in AL, but believe that its attractive attributes are relatively well digested and discounted in the stock."
Barclays maintains an Overweight rating on AER, but lowers price target from $18 to $15, OW-rating on AYR, but lowers price target from $19 to $18. Maintains an Equalweight rating on AL and lowers PT from $27 to $23.
Analyst, David E. Fintzen, said, "We believe the market is potentially mispricing aircraft lessors as our analysis suggests a large valuation gap between Aircatle (NYSE: AYR) & AerCap (NYSE: AER) and Air Lease (NYSE: AL) persists. In our view, this disconnect is largely a function of AL's rapid growth potential and the perception of low or no growth at AYR and AER (a perception that we disagree with). Moreover, we believe that markets do in fact pay for income as well as growth. While AYR provides the income potential as well as growth (after adjusting for certain accounting policies discussed in this note), the stock trades well below where our regression analysis of Russell 2000 companies would suggest. We continue to see value in the aircraft leasing space, with a preference for AYR followed by AER. We also see upside potential in AL, but believe that its attractive attributes are relatively well digested and discounted in the stock."
Barclays maintains an Overweight rating on AER, but lowers price target from $18 to $15, OW-rating on AYR, but lowers price target from $19 to $18. Maintains an Equalweight rating on AL and lowers PT from $27 to $23.
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