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Air Lease (AL) Hits 52-Week Low: Does it Still Hold Promise?

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Shares of Air Lease Corporation (AL - Free Report) 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 VGM Score of B carried by this Los Angeles, CA-based transportation company validates the fact that it still holds promise despite the above-mentioned headwinds.

Considering the bullish readings and the company’s solid fundamentals, the current price seems a good entry point for investors. The Zacks Rank #2 (Buy) carried by Air Lease seems to suggest the same.

Other Stocks to Consider

Investors interested in the Zacks Transportation sector may also consider Azul S.A. (AZUL - Free Report) , Air France-KLM SA (AFLYY - Free Report) and International Consolidated Airlines Group, S.A. (ICAGY - Free Report) ,each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Shares of Azul and Air France have gained 49.7% and 19.7%, respectively, in the past six months. Meanwhile, International Consolidated Airlines stock boasts an impressive earnings history, having outpaced the Zacks Consensus Estimate in three of the trailing four quarters, the average beat being 92.9%.

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