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Here's Why Investors Should Give Air Lease Stock a Miss Now
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Air Lease’s (AL - Free Report) financial stability is challenged by escalated operating expenses. Elevated interest expenses are further putting a strain on the company’s bottom line, making it an unattractive choice for investors’ portfolios.
Let’s delve deeper.
Southward Earnings Estimate Revision: The Zacks Consensus Estimate for current-quarter earnings has been revised 5.4% downward in the past 60 days. For the current year, the consensus mark for earnings has moved 6.7% south in the same time frame. The unfavorable estimate revisions indicate brokers’ lack of confidence in the stock.
Weak Zacks Rank: AL currently carries a Zacks Rank #4 (Sell).
Unimpressive Price Performance: Air Lease’s shares have declined 4.8% in the past 90 days against the industry’s 2% rise.
Image Source: Zacks Investment Research
Other Headwinds: The northward movement in operating expenses is hurting Air Lease’sbottom line, challenging its financial stability. In the second quarter of 2024, total operating expenses rose by 6% year over year. This surge in operating expenses was primarily driven by an increase in interest expenses.
In the second quarter of 2024, interest expenses, accounting for 37.7% of the total operating expenses, rose 9.4% year over year. The company’s high debt levels are concerning.
Long-Term Debt to Capitalization
Image Source: Zacks Investment Research
Moreover, AL is grappling with its weak liquidity. In the second quarter of 2024, the company’s current ratio (a measure of liquidity) was 0.50. A current ratio of less than 1 is not desirable as it implies that the company has insufficient capital to pay off its short-term debt.
Stocks to Consider
Some better-ranked stocks for investors’ consideration in the Zacks Transportation sector include C.H. Robinson Worldwide (CHRW - Free Report) and Westinghouse Air Brake Technologies (WAB - Free Report) .
The company has an impressive earnings surprise history. Its earnings outpaced the Zacks Consensus Estimate in three of the trailing four quarters and missed once, delivering an average surprise of 7.3%. Shares of CHRW have risen 17.5% in the past year.
WAB sports a Zacks Rank #2 (Buy) at present and has an expected earnings growth rate of 26% for the current year.
The company has a discouraging track record with respect to the earnings surprise, having surpassed the Zacks Consensus Estimate in three of the trailing four quarters. The average beat is 11.8%. Shares of WAB have climbed 49.8% in the past year.
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Here's Why Investors Should Give Air Lease Stock a Miss Now
Air Lease’s (AL - Free Report) financial stability is challenged by escalated operating expenses. Elevated interest expenses are further putting a strain on the company’s bottom line, making it an unattractive choice for investors’ portfolios.
Let’s delve deeper.
Southward Earnings Estimate Revision: The Zacks Consensus Estimate for current-quarter earnings has been revised 5.4% downward in the past 60 days. For the current year, the consensus mark for earnings has moved 6.7% south in the same time frame. The unfavorable estimate revisions indicate brokers’ lack of confidence in the stock.
Weak Zacks Rank: AL currently carries a Zacks Rank #4 (Sell).
Unimpressive Price Performance: Air Lease’s shares have declined 4.8% in the past 90 days against the industry’s 2% rise.
Image Source: Zacks Investment Research
Other Headwinds: The northward movement in operating expenses is hurting Air Lease’sbottom line, challenging its financial stability. In the second quarter of 2024, total operating expenses rose by 6% year over year. This surge in operating expenses was primarily driven by an increase in interest expenses.
In the second quarter of 2024, interest expenses, accounting for 37.7% of the total operating expenses, rose 9.4% year over year. The company’s high debt levels are concerning.
Long-Term Debt to Capitalization
Image Source: Zacks Investment Research
Moreover, AL is grappling with its weak liquidity. In the second quarter of 2024, the company’s current ratio (a measure of liquidity) was 0.50. A current ratio of less than 1 is not desirable as it implies that the company has insufficient capital to pay off its short-term debt.
Stocks to Consider
Some better-ranked stocks for investors’ consideration in the Zacks Transportation sector include C.H. Robinson Worldwide (CHRW - Free Report) and Westinghouse Air Brake Technologies (WAB - Free Report) .
C.H. Robinson Worldwide currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here. CHRW has an expected earnings growth rate of 25.2% for the current year.
The company has an impressive earnings surprise history. Its earnings outpaced the Zacks Consensus Estimate in three of the trailing four quarters and missed once, delivering an average surprise of 7.3%. Shares of CHRW have risen 17.5% in the past year.
WAB sports a Zacks Rank #2 (Buy) at present and has an expected earnings growth rate of 26% for the current year.
The company has a discouraging track record with respect to the earnings surprise, having surpassed the Zacks Consensus Estimate in three of the trailing four quarters. The average beat is 11.8%. Shares of WAB have climbed 49.8% in the past year.