AER - Embedded Expectations Analysis - 2018 10 09
AerCap Holdings N.V. (AER:USA) currently trades above historical averages relative to UAFRS-based (Uniform) Earnings, with a 20.0x Uniform P/E. However, even at these levels, the market has bearish expectations for the firm, and management has concerns about demand in China and production issuesSpecifically, management may be concerned about weakening currencies affecting demand in certain segments, particularly in China, and that the vast majority of their aircraft sales for FY 2018 have occurred in H1. Furthermore, they may have concerns about the problems with the Package C engines designed by Rolls Royce, and may be exaggerating the demand for the Pratt & Whitney airplanes that have seen production issues as well. They may also be understating the impact of lease rates over the past year, and may lack confidence in their ability to continue buying back shares. Finally, they may lack confidence in their ability to sustain strong net gains on sales and operating free cash flow
Aercap Holdings is an integrated global aviation company engaged in aircraft leasing. Co. acquires aviation assets at attractive prices, lease the assets to suitable lessees, and manage the funding and other lease related costs efficiently. Co. also provides aircraft management services. Co. operates its business on a global basis, providing aircraft to customers in every major geographical region. As of Dec 31 2017, Co. owned 980 aircraft and managed 113 aircraft.
In 2009, just as the dust was settling from the last major equity and credit market crises, we launched a boutique research firm with the intention of breaking Wall Street’s biases and broken incentives:
- GAAP and IFRS have failed to provide rules for reliable financial statement reporting
- Stock analyst recommendations are not grounded in disciplined financial analysis
- Credit agencies have been set up to grossly fail in their responsibilities to investors and the public markets
- Utter lack of willingness of major research firms to employ the the most advanced forensic analysis available
We sought to provide investors and company analysts with a source of information that changed all that.
Many years later, our business model remains because little has changed on Wall Street.
- Corporate credit ratings remain years behind the fundamental underpinnings of company performance
- Stock analysts continue to make recommendations with deeply inherent biases
- Research firms have failed to break down the walls between credit, equity, and macroeconomic research
- The governing accounting bodies have created more leeway for mis-estimates and mis-classifications as financials have become unwieldy and overwhelming
The integrity of Valens Research is founded in our disciplined processes and analytics. No “star” analysts. No corporate advisory relationships. No-nonsense opinions and recommendations.
Unfortunately, this report is not available for the investor type or country you selected.
Browse all ResearchPool reportsReport is subscription only.
Thank you, your report is ready.
Thank you, your report is ready.