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Is AerCap (AER) a Great Value Stock Right Now?

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Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Nevertheless, we are always paying attention to the latest value, growth, and momentum trends to underscore strong picks.

Looking at the history of these trends, perhaps none is more beloved than value investing. This strategy simply looks to identify companies that are being undervalued by the broader market. Value investors use a variety of methods, including tried-and-true valuation metrics, to find these stocks.

Zacks has developed the innovative Style Scores system to highlight stocks with specific traits. For example, value investors will be interested in stocks with great grades in the "Value" category. When paired with a high Zacks Rank, "A" grades in the Value category are among the strongest value stocks on the market today.

AerCap (AER - Free Report) is a stock many investors are watching right now. AER is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock has a Forward P/E ratio of 7.30. This compares to its industry's average Forward P/E of 8.20. Over the last 12 months, AER's Forward P/E has been as high as 8.72 and as low as 5.58, with a median of 7.34.

Investors should also recognize that AER has a P/B ratio of 0.85. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. This company's current P/B looks solid when compared to its industry's average P/B of 0.91. AER's P/B has been as high as 0.99 and as low as 0.61, with a median of 0.84, over the past year.

Finally, our model also underscores that AER has a P/CF ratio of 2.70. This metric takes into account a company's operating cash flow and can be used to find stocks that are undervalued based on their solid cash outlook. AER's current P/CF looks attractive when compared to its industry's average P/CF of 2.88. Within the past 12 months, AER's P/CF has been as high as 3.25 and as low as 2.05, with a median of 2.69.

These are only a few of the key metrics included in AerCap's strong Value grade, but they help show that the stock is likely undervalued right now. When factoring in the strength of its earnings outlook, AER looks like an impressive value stock at the moment.


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