Investing.com -- FTAI Aviation (NASDAQ: FTAI) shares rose 7%, recovering from the previous day’s significant losses triggered by a critical short report from Muddy Waters (NYSE:WAT). Analysts have come to the company’s defense, leading to a rebound in the stock price.
The short report by Muddy Waters, which caused FTAI Aviation’s shares to plummet to their worst one-day drop on record, accused the company of financial manipulation. In response, FTAI Aviation contested the allegations, stating to Bloomberg that the report was an attempt to manipulate the company’s stock price for profit. FTAI Aviation strongly disagreed with the claims, some of which were attributed to an anonymous former executive.
Stifel analyst Frank Galanti maintained a Buy rating and a $167.00 price target on the stock, challenging Muddy Waters’ assertion that 80% of FTAI’s Aerospace Products adjusted EBITDA is from engine sales. Galanti believes the actual figure is closer to 20%. He suggested that the market overreacted to the Muddy Waters report and encouraged investors to "Buy the dip," indicating a potential undervaluation due to the sell-off.
Supporting the bullish outlook, BTIG analyst Andre Madrid reiterated a Buy rating with a $190.00 price target, expressing confidence in FTAI Aviation’s business strategy and profitability potential. Madrid’s stance remained unchanged even after reconnecting with the company’s management following the short report.
Furthermore, Deutsche Bank (ETR:DBKGn) analyst Hillary Cacanando also reiterated a Buy rating and a $180.00 price target, dismissing the allegations by Muddy Waters as largely baseless. Cacanando acknowledged the complexity of FTAI’s accounting due to its vertically integrated business model but found no evidence of manipulation after reviewing the financials and the short-seller’s claims.
Overall, the strong defense by analysts has contributed to a turnaround in investor sentiment, reflected in the stock’s recovery.
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