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Technology Stocks : Aircraft leasing companies. FLY, AER, WLFC
AER 92.30+1.6%Jun 18 4:00 PM EDT

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From: Paul Senior3/14/2024 12:56:43 AM
   of 50
A lot of sectors are at 12-month highs. The aircraft leasing companies might be such a sector too.

I'll go for a few more shares of AER, now at a 12-mo high.

We see that airline travel is still strong. Boeing can't make delivery of all the planes contracted for.

From Barron's 3/12/24: "Airlines are also facing an uptick in maintenance costs as higher flight volumes and longer hours in the air require more engine overhauls and extensive checks of the aircrafts, the companies have said."

All this should - imo - increase the demand for planes and maybe increase the value of planes the leasing companies own. And increase demand for servicing the planes.

Today, AER trades at a p/e of 7 and slightly over book value. In earlier, maybe more normal times, AER would sell under bv. P/e is about 6 and 15 year median p/e is slightly under 8. Company has been profitable in each of the past 15 years.

Maybe the stock won't continue its run. It might fall a bit, but I don't see anything that would cause much of decline, given the outlook I see for airline travel and demand for planes. Maybe there won't be a lot of new planes to be built and leased. That would be a negative. If so, then otoh, the planes already leased will be more valuable.
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