Tuesday, November 17, 2020

(Exclusive) AerCap's Valuation Is Now Post-Panic, But Still Offers Upside As Air Travel Slowly Recovers

Investors who bought AerCap (AER) shares below $12 in mid-March are already sitting on impressive gains, but I believe there is still meaningful upside available as the Street shifts from panic-level valuations to a more measured assessment of AerCap’s long-term value. There are still plenty of unknowns with respect to the path back to normalized air traffic levels and the financial health of airlines, but I see little risk of AerCap finding itself irreparably squeezed on liquidity, and this crisis should actually improve the prospects for the leasing industry over the next decade.

Across a range of valuation approaches (excess returns, discounted cash flow, price/book), I believe AerCap shares are undervalued below $50.

 

Read more here: 

(Exclusive) AerCap's Valuation Is Now Post-Panic, But Still Offers Upside As Air Travel Slowly Recovers

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