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Air Lease (AL) Down 0.6% Since Last Earnings Report: Can It Rebound?

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It has been about a month since the last earnings report for Air Lease (AL - Free Report) . Shares have lost about 0.6% in that time frame, underperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is Air Lease due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.

Q1 Earnings Beat

Air Lease reported first-quarter 2023 earnings of $1.06 per share surpassed the Zacks Consensus Estimate of $1.00 but declined on a year-over-year basis.

Total revenues of $636.1 million outpaced the Zacks Consensus Estimate of $633.5 million and jumped 6% year over year, owing to the continuous growth in the company’s fleet, partially offset by decline in end of lease revenue.

Other Statistics

Revenues from the rental of flight equipment climbed 9% year over year to $617.77 million in the reported quarter. Revenues from aircraft sales, trading activity and other sources fell 38.9% from the year-ago quarter to $18.36 million.

Operating expenses rose 20.7% to $477.9 million.

As of Mar 31, 2023, Air Lease owned 437 aircraft with a net book value of $25.7 billion. The total fleet size at the end of the first quarter was 899 (including the owned fleet of 437) compared with 900 at the end of December 2022.

Liquidity

Air Lease exited the first quarter with cash and cash equivalents of $690.41 million compared with $766.41 million at December 2022-end. As of Mar 31, 2023, AL had $19.4 billion of debt financing and net of discount and issuance costs compared with $18.6 billion as of Dec 31, 2022.

Dividend Update

On Apr 28, 2023, Air Lease’s board of directors declared a quarterly cash dividend of 20 cents per share, payable on Jul 7, 2023 to shareholders of record as of June 6, 2023.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed a downward trend in estimates revision.

VGM Scores

At this time, Air Lease has a subpar Growth Score of D, a grade with the same score on the momentum front. However, the stock was allocated a grade of B on the value side, putting it in the top 40% for this investment strategy.

Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been broadly trending downward for the stock, and the magnitude of this revision has been net zero. Notably, Air Lease has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.

Performance of an Industry Player

Air Lease belongs to the Zacks Transportation - Equipment and Leasing industry. Another stock from the same industry, Ryder (R - Free Report) , has gained 0.1% over the past month. More than a month has passed since the company reported results for the quarter ended March 2023.

Ryder reported revenues of $2.95 billion in the last reported quarter, representing a year-over-year change of +3.4%. EPS of $2.81 for the same period compares with $3.59 a year ago.

Ryder is expected to post earnings of $3.03 per share for the current quarter, representing a year-over-year change of -31.6%. Over the last 30 days, the Zacks Consensus Estimate has changed -0.9%.

Ryder has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of A.


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