FTAI Aviation stock rebound likely as BTIG highlights disruptive aftermarket strategy

On Thursday, BTIG analyst Andre Madrid confirmed his Buy rating and $190.00 price target for FTAI Aviation (NASDAQ: FTAI) stock, despite recent accusations of financial misconduct. The company, currently valued at $11.9 billion, maintains a strong consensus rating among analysts, with price targets ranging from $160 to $300. On January 15, a short report emerged alleging that FTAI Aviation had engaged in financial manipulation and misleading accounting practices.

The report accused the company of overstating the scale of its aftermarket business, misrepresenting engine sales, manipulating asset depreciation to boost margins in its Aerospace Products division, and engaging in channel stuffing.

Following the circulation of the short report, FTAI Aviation's shares experienced a significant drop, closing down 24.2% after temporarily plunging nearly 42% during the day. According to InvestingPro data, the stock recorded a -31.22% return over the past week, though it maintains an impressive 144% gain over the last year. Despite this market reaction, BTIG continues to support the company's business strategy.

Madrid stated that the firm's outlook remains optimistic regarding FTAI Aviation's innovative approach to the aftermarket sector and its potential to enhance profitability within its Aerospace Products business.

Madrid's reassurance comes after a thorough review of the situation, including a discussion with FTAI Aviation's management team. In light of this conversation, BTIG has decided to stand by its initial assessment and maintain its Buy rating and price target for the company's stock.

The firm's projections and expectations for FTAI Aviation's financial performance remain unchanged despite the allegations raised by the short report. InvestingPro data shows the company maintains strong liquidity with a current ratio of 3.86 and has achieved robust revenue growth of 36.77% in the last twelve months.

Subscribers to InvestingPro can access 15 additional investment tips and a comprehensive Pro Research Report for deeper insights into FTAI's financial health and market position.

In other recent news, FTAI Aviation has been the focus of several notable developments. The company has announced a Strategic Capital Initiative valued at over $3 billion, which analysts from Benchmark and Wolfe Research believe could significantly transform the company's market position and earnings potential. This announcement has led to Wolfe Research upgrading FTAI Aviation's stock from Peer Perform to Outperform, with a price target of $190.

The company has also provided an adjusted EBITDA guidance for 2025, projecting between $1.1 billion and $1.15 billion. This has led Stifel analysts to increase their price target for FTAI Aviation to $167, while maintaining a Buy rating.

However, the company has faced allegations from Muddy Waters (NYSE:WAT) Research, which accuses FTAI Aviation of misleading financial reporting. Stifel analysts have countered these claims, suggesting that the sale of whole engines in the company's Aerospace Products segment accounts for approximately 20% of adjusted EBITDA, not the 80% claimed by Muddy Waters.

Despite these allegations, multiple analyst firms, including Stifel, Benchmark, and Wolfe Research, maintain positive outlooks on FTAI Aviation, emphasizing the company's strong growth prospects and strategic initiatives. These recent developments highlight the evolving dynamics of FTAI Aviation's financial and market position.

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