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On Tuesday, TD Cowen analysts raised the price target for Air Lease Corp (NYSE:AL) shares to $55.00, up from the previous $54.00, while maintaining a Buy rating on the stock. The new target falls within the broader analyst range of $45-$69, with the stock currently trading at $52.55. According to InvestingPro data, Air Lease has shown strong momentum with impressive returns over the last month. The adjustment followed Air Lease’s reported earnings, which surpassed both TD Cowen’s and the First Call consensus estimate of $0.87, coming in at $0.89 per diluted share, excluding Russia recovery.
The company’s earnings beat was primarily attributed to higher revenue, fueled by robust aircraft sales and other gains. Lease revenue also marginally exceeded forecasts. Notably, Air Lease’s revenue from aircraft sales and trading came in at $93 million, significantly higher than the $72 million that had been anticipated, contributing to an approximately $0.15 impact on earnings per share. Meanwhile, lease revenue was reported at $645 million, slightly above the $643 million estimated. The company maintains impressive gross profit margins of 58.16% and trades at a P/E ratio of 15.73x.
However, Air Lease’s expenses for the quarter were higher than expected, totaling $599 million compared to the $580 million forecast. The increase was largely due to selling, general, and administrative expenses, as well as stock-based compensation, both of which were around $9 million more than predicted. A notable factor in the expense surge was a one-time retirement-related payout to Executive Chairman Steven Udvar-Házy, amounting to $17 million. InvestingPro analysis reveals that the company operates with a significant debt burden and is currently experiencing rapid cash burn, factors that warrant monitoring.For investors seeking deeper insights, InvestingPro offers comprehensive analysis with 12 additional exclusive tips and a detailed Pro Research Report, providing valuable context for Air Lease’s financial position and growth prospects.
The analysts at TD Cowen viewed the quarter’s results positively, emphasizing the revenue that outpaced their estimates, driven by stronger aircraft sales and trading revenue, along with marginally higher lease revenue. Despite the higher-than-anticipated expenses, the overall performance of Air Lease was seen favorably by the analysts, reflecting confidence in the company’s financial health and market position.
In other recent news, Air Lease Corporation reported its first-quarter 2025 earnings, surpassing analysts’ expectations with an earnings per share (EPS) of $1.51 compared to the forecast of $0.89. The company also exceeded revenue projections, reporting $738 million against the expected $713.85 million. Air Lease’s strong financial performance was driven by robust rental revenues and significant proceeds from aircraft sales. The company anticipates $3-3.5 billion in new aircraft deliveries for 2025. Additionally, Air Lease’s management highlighted a significant 50% increase in lease rates for an Asian airline, indicating strong market demand. The company remains optimistic about its future, with plans for significant aircraft deliveries throughout 2025. Executive leadership expressed confidence in the company’s trajectory, emphasizing strategic capital allocation and growth opportunities.
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