We came across a bullish paper on the alternative value of air leasing companies (ALs), don't lie. In this article, we will summarize the Bulls' paper on Al. As of May 14, shares of AIR LEASE Corporation (AL) were trading at $57.27Th. According to Yahoo Finance, Al's P/E is 10.01 behind.
An impressive plane took off from the main runway served by regional airlines.
Founded by aviation pioneer Steven Udvar-Házy, AIR LEASE Corporation (AL), operates a scale and resilient aircraft leasing platform with a proven model that acquires new aircraft using investment-grade debt and leases them to more than 200 airlines in 70 countries for a long time. As of the first quarter of 2025, Al has 487 aircraft worth US$28.6 billion, with an average fleet age of only 4.7 years, a lease term of 7.2 years, and has managed another 57 aircraft. Its strong forward orders for 269 aircraft (50% of existing fleets) have already received a 62% hit rate, with all delivery fully invested by 2026, ensuring predictable future cash flows.
The global shift to leasing aircraft, rising from 32% in 2004 to 50% in 2024, coupled with restricted aircraft supply and rolling leasing in the era of low interest rates, has created favorable demand supply dynamics. Air leasing is expected to increase yields by 150-200 in the next few years. However, despite these headwinds, stocks are discounted with industry leader Aercap discounts at a huge discount. Compared with AERCAP's 9.4 and 1.3 times, AL's market capitalization is $6 billion, lagging behind earnings per share at $5.33, just 10 times and only 0.77 times. This reflects a slower book value compounding, lower returns on assets, and a transparent capital allocation strategy. However, AL's growth prospects are compelling: By 2029, deploying its $17 billion orders could increase the asset base to $50 billion and generate $2.7 billion in operating cash flow (or $24 per share) to swap it for a potential stock price of $89. With minimal dilution, rising rental output and structural tailwinds, AL provides downside protection and a lot of room for upside.
Air Freight Company (AL) is not on our list The 30 Most Popular Stocks in Hedge Funds. According to our database, at the end of the fourth quarter, the 30 hedge fund portfolios were 33 in the previous quarter. Although we acknowledge the risks and potential of AL as an investment, our belief is that certain AI stocks have greater expectations and provide higher returns over a shorter time frame. If you are looking for more promising AI stocks than AL, but their earnings are trading at less than 5 times the price, check out our report Cheapest AI stocks.