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Here's Why Investors Should Avoid Air Lease (AL) Stock Now
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Air Lease Corporation (AL - Free Report) is currently mired in multiple headwinds, which, we believe, have made it an unimpressive investment option.
Let’s delve deeper.
Southward Earnings Estimate Revisions: The Zacks Consensus Estimate for first-quarter 2024 earnings has been revised 20.5% downward over the past 90 days. For 2024, the consensus mark for earnings has moved 8.2% south in the same time frame. The unfavorable estimate revisions indicate brokers’ lack of confidence in the stock.
Weak Zacks Rank and Style Score: Air Lease currently carries a Zacks Rank #4 (Sell). Moreover, the company’s current Momentum Style Score of F shows its short-term unattractiveness.
Unimpressive Price Performance: AL has lost 2.7% over the past six months against its industry’s 16.3% growth.
Image Source: Zacks Investment Research
Other Headwinds: Rising operating expenses pose a threat to AL’s bottom line. Total expenses climbed 8.9% year over year to $1.68 billion in 2022, primarily due to higher interest expenses and depreciation of flight equipment costs. During 2023, operating expenses rose 18.6% to $1.99 billion.
Additionally, Air Lease’s liquidity position is a concern. Cash and cash equivalent of $460.87 million at the end of the fourth quarter of 2023 was lower than the $19.2 billion of debt financing and net of discount and issuance costs. This implies that the company does not have enough cash to meet its debt burden.
GATX has an encouraging track record with respect to earnings surprise, having surpassed the Zacks Consensus Estimate in three of the last four quarters (missing the mark in the remaining one). The average beat is 16.47%.
The Zacks Consensus Estimate for 2024 earnings has been revised 6.1% upward over the past 90 days. GATX has an expected earnings growth rate of 3.68% for 2024. Shares of GATX have gained 13.9% in the past year.
SkyWest's fleet-modernization efforts are commendable. The Zacks Consensus Estimate for SKYW’s 2024 earnings has improved 11.1% over the past 90 days. Shares of SKYW have surged 222.2% in the past year.
SKYW has an expected earnings growth rate of more than 100% for 2024. SKYW delivered a trailing four-quarter earnings surprise of 128.02%, on average.
CPA has an encouraging track record with respect to earnings surprise, having surpassed the Zacks Consensus Estimate in three of the last four quarters (missing the mark in the remaining one). The average beat is 18.02%.
The Zacks Consensus Estimate for CPA’s 2024 earnings has been revised 7.1% upward over the past 90 days. Shares of CPA have gained 7.2% in the past year.
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Here's Why Investors Should Avoid Air Lease (AL) Stock Now
Air Lease Corporation (AL - Free Report) is currently mired in multiple headwinds, which, we believe, have made it an unimpressive investment option.
Let’s delve deeper.
Southward Earnings Estimate Revisions: The Zacks Consensus Estimate for first-quarter 2024 earnings has been revised 20.5% downward over the past 90 days. For 2024, the consensus mark for earnings has moved 8.2% south in the same time frame. The unfavorable estimate revisions indicate brokers’ lack of confidence in the stock.
Weak Zacks Rank and Style Score: Air Lease currently carries a Zacks Rank #4 (Sell). Moreover, the company’s current Momentum Style Score of F shows its short-term unattractiveness.
Unimpressive Price Performance: AL has lost 2.7% over the past six months against its industry’s 16.3% growth.
Image Source: Zacks Investment Research
Other Headwinds: Rising operating expenses pose a threat to AL’s bottom line. Total expenses climbed 8.9% year over year to $1.68 billion in 2022, primarily due to higher interest expenses and depreciation of flight equipment costs. During 2023, operating expenses rose 18.6% to $1.99 billion.
Additionally, Air Lease’s liquidity position is a concern. Cash and cash equivalent of $460.87 million at the end of the fourth quarter of 2023 was lower than the $19.2 billion of debt financing and net of discount and issuance costs. This implies that the company does not have enough cash to meet its debt burden.
Stocks to Consider
Some better-ranked stocks from the Zacks Transportation sector are GATXCorporation (GATX - Free Report) , SkyWest, Inc. (SKYW - Free Report) and Copa Holdings, S.A. (CPA - Free Report) . Each stock presently carries a Zacks Rank of 2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
GATX has an encouraging track record with respect to earnings surprise, having surpassed the Zacks Consensus Estimate in three of the last four quarters (missing the mark in the remaining one). The average beat is 16.47%.
The Zacks Consensus Estimate for 2024 earnings has been revised 6.1% upward over the past 90 days. GATX has an expected earnings growth rate of 3.68% for 2024. Shares of GATX have gained 13.9% in the past year.
SkyWest's fleet-modernization efforts are commendable. The Zacks Consensus Estimate for SKYW’s 2024 earnings has improved 11.1% over the past 90 days. Shares of SKYW have surged 222.2% in the past year.
SKYW has an expected earnings growth rate of more than 100% for 2024. SKYW delivered a trailing four-quarter earnings surprise of 128.02%, on average.
CPA has an encouraging track record with respect to earnings surprise, having surpassed the Zacks Consensus Estimate in three of the last four quarters (missing the mark in the remaining one). The average beat is 18.02%.
The Zacks Consensus Estimate for CPA’s 2024 earnings has been revised 7.1% upward over the past 90 days. Shares of CPA have gained 7.2% in the past year.