AL - Embedded Expectations Analysis - 2018 10 23
Air Lease Corp. (AL:USA) currently trades near historical averages relative toUAFRS-based (Uniform) Assets, with a 1.3x Uniform P/B. At these levels, the market has muted expectations for the firm, and management has concerns about their Thunderbolt II, overall market demand, and SG&A expenses.
Specifically, management may lack confidence in their statement that their customers want to keep dealing with AL in all phases of the lease transaction, and may have concerns about their Thunderbolt II aircraft. Additionally, they may lack confidence in their ability to develop a replicable and disciplined platform for the profitable sale of aircrafts, and in the sustainability of increased aircraft demand. Moreover, they may lack confidence in their ability to maintain lower-than-average SG&A expenses, and may have concerns about future incremental growth opportunities. Finally, they may have concerns about their asset base, and may lack confidence in the sustainability of high order rates
Air Lease is an aircraft leasing company. The company is engaged in purchasing new commercial jet transport aircraft directly from aircraft manufacturers, such as The Boeing Company and Airbus S.A.S., and leasing those aircraft to airlines. In addition to its leasing activities, the company sells aircraft from its operating lease portfolio to third parties, including other leasing companies, financial services companies, airlines and other investors. The company also provides fleet management services to investors and owners of aircraft portfolios. The company provides aircraft to airline customers in Asia, the Pacific Rim, Latin America, the Middle East, Europe, Africa, and North America.
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