Uncertainty (And Plenty Of Fear) Dominating AerCap's Valuation

Bad news is something that institutional investors can typically deal with, but uncertainty can cripple them, and when in doubt, they tend to assume the worst. Looking at AerCap (AER), there’s almost nothing but uncertainty. When will people feel like flying again (let alone when will they be allowed to?)? How many airlines will still be operating? Will AerCap be able to manage its debt maturities in the meantime? And so on.

I won’t pretend to have perfect answers to those questions (I’m still waiting for my crystal ball to come back from the shop…), but I do believe there are a few fundamental concepts you can look at now. AerCap has survived past crises, the company has adequate liquidity for at least the next two years, and so far, it seems that AerCap, banks, aircraft manufacturers, and major airlines are all working together relatively cooperatively. All bets are off if Covid-19 keeps planes grounded indefinitely, but China’s early experience suggests that’s not likely, and I believe AerCap will generate good returns from here.

To read the full article, follow this link:
Uncertainty (And Plenty Of Fear) Dominating AerCap's Valuation