AerCap Still Not Getting The Full Benefit Of Its Quality Operations

I still think the shares remain meaningfully undervalued, but I can’t really complain about the performance of AerCap (AER) shares since my last update, with the shares beating the market with a 16% return – slightly outdoing Air Lease (AL) and outperforming Aircastle (AYR) and Fly Leasing (FLY) by wider margins. The trailing one-year performance still isn’t that robust, though, and there appear to be some ongoing worries about increasing competition in the aircraft leasing space, airline bankruptcies, and the issues around the Boeing (BA) 737 MAX aircraft.

Although delays in the MAX program will be a hassle, it’s a hassle that AerCap can manage. Moreover, I’m not concerned about competition, as few lessors can replicate AerCap’s model and I expect most of the new entrants to scrum with each other over business AerCap really doesn’t want. Although a global recession would be a risk, the long-term trends driving air traffic seem quite resilient and I think AerCap is undervalued below $60.

Click here for more:
AerCap Still Not Getting The Full Benefit Of Its Quality Operations