Air Lease Corporation (AL): A Bull Case Theory

Ricardo Pillai

Fri, May 16, 2025, 12:43 PM 2 min read

We came crossed a bullish thesis on Air Lease Corporation (AL) connected Substack by Value Don't Lie. In this article, we volition summarize the bulls’ thesis connected AL. Air Lease Corporation (AL)'s stock was trading astatine $57.27 arsenic of May 14^th. AL’s trailing P/E was 10.01 according to Yahoo Finance.

An awesome fleet of aircrafts taking disconnected from the main runway of the Regional Air Carrier services.

Air Lease Corporation (AL), founded by aviation pioneer Steven Udvar-Házy, operates a scaled and resilient craft leasing level with a proven exemplary of acquiring caller craft utilizing investment-grade indebtedness and leasing them semipermanent to implicit 200 airlines crossed 70 countries. As of Q1 2025, AL owns 487 craft valued astatine $28.6 billion, with an mean fleet property of conscionable 4.7 years and lease word of 7.2 years, portion managing different 57 planes. Its robust guardant orderbook of 269 aircraft—50% of its existing fleet—is already 62% placed, with each deliveries done 2026 afloat committed, ensuring predictable aboriginal currency flows.

The planetary displacement toward leased aircraft, rising from 32% successful 2004 to 50% successful 2024, coupled with constrained craft proviso and roll-off of low-rate pandemic-era leases, creates a favorable demand-supply dynamic. Air Lease expects 150–200 ground points of output enlargement successful the coming years. Yet, contempt these tailwinds, the banal trades astatine a important discount to AerCap, the manufacture leader. With a $6 cardinal marketplace headdress and $5.33 successful trailing EPS, AL trades astatine 10x net and conscionable 0.77x tangible book, compared to AerCap’s 9.4x and 1.3x respectively. This reflects slower publication worth compounding, little returns connected assets, and a little transparent superior allocation strategy. However, AL’s maturation prospects are compelling: deploying its $17 cardinal orderbook could turn the plus basal to $50 cardinal by 2029, and make $2.7 cardinal successful operating currency flow—or $24 per share—translating to a imaginable banal terms of $89. With minimal dilution, rising lease yields, and structural tailwinds, AL offers some downside extortion and important upside.

Air Lease Corporation (AL) is not connected our database of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 30 hedge money portfolios held AL astatine the extremity of the 4th fourth which was 33 successful the erstwhile quarter. While we admit the hazard and imaginable of AL arsenic an investment, our condemnation lies successful the content that immoderate AI stocks clasp greater committedness for delivering higher returns, and doing truthful wrong a shorter timeframe. If you are looking for an AI banal that is much promising than AL but that trades astatine little than 5 times its earnings, cheque retired our study astir the cheapest AI stock.