Air Lease (AL) Hits 52-Week Low: Does It Still Hold Promise?
Zacks Investment Research | Dec 23, 2018 08:26PM ET
Shares of Air Lease Corporation (NYSE:AL) touched a 52-week low of $29.57 on Dec 21, before recovering marginally to close the day’s trading at $29.67.
In fact, a glimpse of this leading aircraft leasing company’s price trend reveals that the stock has had a hard time on the bourse so far this year. Notably, it incurred a loss of 38% on a year-to-date basis. This downside can be attributed to headwinds like high costs and debts. Challenges in the airline space have also hurt the stock as Air Lease’s results are directly related to the performance of the airline industry.
Year-to-date Price Performance
However, a closer look indicates that things might take a turn for the better.
Why Air Lease Might be a Good Buy
With oil prices currently on a downward trend, the airline market is looking up and this bodes well for Air Lease. Moreover, approximately 18000 jets are expected to retire during the next 20 years. With Air Lease focusing primarily on the replacement market, this huge replacement need is immensely beneficial to this leasing company. The rise in passenger traffic also bodes well for the stock. All these upsides are likely to boost demand for the company’s aircraft.
Moreover, its efforts to expand the company’s fleet are impressive. Air Lease stated that its fleet included 268 owned aircraft and 60 managed planes as of Sep 30. In fact, it has commitments to buy 358 new planes for delivery through 2023.
Air Lease’s endeavours to reward its shareholders are added positives. In fact, the company has an impressive dividend payment history. This November, its board raised the quarterly cash dividend by 30% to 13 cents per share.
The current tax law, which induces massive tax savings, should also encourage the company to engage in such shareholder-friendly activities going forward.
Positive Readings
Air Lease is seeing solid earnings estimate revision activity, which generally translate into rapid price appreciation. Over the past 60 days, the stock has witnessed the Zacks Consensus Estimate for current-year and next-year earnings being revised 5.5% and 0.2% upward, respectively.
Additionally, the Zacks Investment Research
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