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Investing.com - Truist Securities downgraded Aersale (NASDAQ:ASLE) from Buy to Hold on Friday, while lowering its price target to $6.00 from $8.00, citing ongoing challenges in the used serviceable material (USM) marketplace. The stock currently trades at $5.76, and according to InvestingPro data, the company appears undervalued despite trading at a high EV/EBITDA multiple of 27x.
The research firm cut its earnings per share estimates for 2025 and 2026 to $0.20 and $0.47, respectively, down from previous forecasts of $0.42 and $0.77, as Aersale continues to face difficulties accessing used and serviceable material needed for aftermarket parts sales. InvestingPro data shows the company was not profitable in the last twelve months, with revenue declining by 7.63%.
Truist Securities noted that persistent supply chain challenges limiting new aircraft production are resulting in fewer aircraft retirements, creating pressure on the USM marketplace and driving volatility in Aersale’s whole asset sales operations.
The firm also expressed uncertainty about the adoption timeline and revenue potential for Aersale’s AerAware product, stating that while it models for material product revenue growth in 2026, it has "little confidence" in these projections.
For 2025, Truist Securities expects Aersale’s revenues to decline 0.4% year-over-year, contrasting sharply with commercial aerospace aftermarket peers that are projected to see revenue growth in the teens range. Despite these challenges, InvestingPro analysts expect the company to return to profitability this year. Get the full analysis and 8 additional ProTips with an InvestingPro subscription, including exclusive access to the comprehensive Pro Research Report covering ASLE’s detailed financial health metrics and growth prospects.
In other recent news, AerSale Corporation reported its Q1 2025 earnings, which fell short of analyst expectations. The company posted a net loss of $5.3 million, contrasting with a net income of $6.3 million in the same quarter last year. Revenue for the quarter was $65.8 million, significantly below the forecasted $99.52 million and down from $90.5 million in Q1 2024. AerSale’s earnings per share were -$0.05, missing the anticipated $0.09. Despite these challenges, the company remains optimistic about incremental improvements in future quarters and expects full-year sales growth. The firm anticipates that its EBITDA growth will outpace revenue increases, focusing on expanding USM sales and enhancing MRO service offerings. AerSale’s management has highlighted strong demand across engine types and is actively pursuing opportunities to monetize its feedstock investments.
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