AerCap: Street Awaits First Meaningful Post-Merger Guidance, Long-Term Outlook Good

 

Now the hard work begins. AerCap (AER) closed its deal for GE’s (GE) aircraft and engine leasing business (GEACS) back on November 1, and now the company is underway with the task of integrating and “rightsizing” the operations, a process that will probably take a couple of years and include selling non-core assets on an opportunistic basis. At the same time, the global air travel industry continues a slow road back to normal, and AerCap remains well-placed to be the partner of choice for airlines who can’t, or choose not to, own their fleets outright.

These shares haven’t done that much since my last write-up, rising about 5% and underperforming the S&P 500 over that time. At this point, the worst things I can find to say about AerCap is that rates are going up (which could actually help them), they don’t pay a dividend (nothing new, and unlikely to change), the air travel recovery may be a longer, rockier process, and the stock is already well-liked and widely respected. Even so, while I don’t necessarily think AerCap is a top call for the next 12 months, I still see meaningful long-term value, with double-digit long-term annualized potential and double-digit short-term potential as well.

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AerCap: Street Awaits First Meaningful Post-Merger Guidance, Long-Term Outlook Good