AerCap presents a particularly compelling story to me now with the recent Airbus recall and seemingly no end in sight for the supply-demand imbalance of commercial aircrafts. Curious to know what metrics you’re now looking mostly closely at and what you believe would give AER the re-rate it deserves?
Hi Saraj - I think book value per share can keep growing healthily from here just from the equity multiple arbitrage. We're now starting to see evidence of the core business improving with better lease spreads. So as more of their book reprices at higher lease rates, the improvement in the core biz (vs. growth via financial engineering) might be enough to cause a positive re-rate. We shall see.
AerCap presents a particularly compelling story to me now with the recent Airbus recall and seemingly no end in sight for the supply-demand imbalance of commercial aircrafts. Curious to know what metrics you’re now looking mostly closely at and what you believe would give AER the re-rate it deserves?
Hi Saraj - I think book value per share can keep growing healthily from here just from the equity multiple arbitrage. We're now starting to see evidence of the core business improving with better lease spreads. So as more of their book reprices at higher lease rates, the improvement in the core biz (vs. growth via financial engineering) might be enough to cause a positive re-rate. We shall see.