On Thursday, Wolfe Research maintained a positive stance on FTAI Aviation (NASDAQ:FTAI) despite recent turbulence in the company’s stock performance. Analysts at Wolfe Research reiterated an Outperform rating and a $190.00 price target for FTAI Aviation’s shares. The firm addressed the recent critique from short seller Muddy Waters (NYSE:WAT), which led to a significant 24% decline in FTAI’s stock price today.
According to InvestingPro data, the stock has experienced a sharp 31.22% decline over the past week, with current price levels aligning with the platform’s Fair Value estimate. Wolfe Research plans to host an "FTAI Office Hour" on Thursday at 8 am ET to discuss investor concerns and provide insights into the short report’s assertions.
The analysts noted that the short report failed to account for the implications of FTAI Aviation’s Strategic Capital Initiative, which they believe is a crucial element for future positive earnings revisions. They also highlighted that the report did not acknowledge the potential benefits from FTAI’s Parts Manufacturer Approval (PMA) prospects.
InvestingPro data reveals strong revenue growth of 36.77% over the last twelve months, with analysts expecting continued sales growth this year. The company maintains a healthy current ratio of 3.86, indicating strong liquidity to support its strategic initiatives. Wolfe Research expressed disagreement with some of the assumptions made in the Muddy Waters report, based on their understanding of FTAI and discussions with management.
The report’s focus on FTAI’s unique accounting practices and business complexity was acknowledged by Wolfe Research, which has previously commented on these aspects. However, the firm countered the report’s concerns, particularly regarding the cycling of engine asset sales within FTAI’s Aerospace Products division. Wolfe Research pointed out that management confirmed the sale of modules, rather than engines, as the primary contributor to cash flow.
Wolfe Research also discussed the profitability contributors within FTAI’s Aerospace Products, including repair value, distribution or just-in-time value, and asset value arbitrage. They anticipate the latter to moderate but expect it to be supplemented by future PMA benefits. Despite the near-term volatility, Wolfe Research views the current share price as an attractive entry point, anticipating benefits from upcoming strategic partnerships, asset acquisitions, and strong fourth-quarter results, which could lead to increased EBITDA targets for 2026.
InvestingPro shows analyst consensus remains strongly bullish with a rating of 1.46 (where 1 is Strong Buy), with price targets ranging from $160 to $300. For deeper insights into FTAI’s valuation and growth prospects, investors can access the comprehensive Pro Research Report, available exclusively to InvestingPro subscribers, along with 14 additional ProTips and extensive financial metrics.
In other recent news, FTAI Aviation has been at the center of various developments. The company has faced allegations from Muddy Waters Research, accusing it of misleading financial reporting. Despite this, BTIG and Stifel analysts have maintained their Buy ratings, with BTIG’s price target at $190.00 and Stifel’s at $167.00, after thorough reviews of the situation.
Wolfe Research analysts have upgraded FTAI Aviation’s stock from Peer Perform to Outperform, setting a price target of $190.00, following the company’s announcement of a Strategic Capital Initiative valued at over $3 billion. Benchmark analysts have also endorsed FTAI Aviation with a strong Buy rating, highlighting the same initiative.
FTAI Aviation has provided an adjusted EBITDA guidance for 2025, projecting between $1.1 billion and $1.15 billion. These recent developments underscore the ongoing dynamics of FTAI Aviation’s financial and market position.
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