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Air Lease Corporation (NYSE:AL): Is It A Smart Long Term Opportunity?

Simply Wall St

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In December 2018, Air Lease Corporation (NYSE:AL) announced its earnings update. Overall, analysts seem fairly confident, as a 23% increase in profits is expected in the upcoming year, though this is noticeably lower than the historical 5-year average earnings growth of 29%. By 2020, we can expect Air Lease’s bottom line to reach US$629m, a jump from the current trailing-twelve-month of US$511m. Below is a brief commentary around Air Lease's earnings outlook going forward, which may give you a sense of market sentiment for the company. Investors wanting to learn more about other aspects of the company should research its fundamentals here.

Check out our latest analysis for Air Lease

How will Air Lease perform in the near future?

The view from 9 analysts over the next three years is one of positive sentiment. Broker analysts tend to forecast up to three years ahead due to a lack of clarity around the business trajectory beyond this. To get an idea of the overall earnings growth trend for AL, I’ve plotted out each year’s earnings expectations and inserted a line of best fit to determine an annual rate of growth from the slope of this line.

NYSE:AL Past and Future Earnings, April 6th 2019

This results in an annual growth rate of 18% based on the most recent earnings level of US$511m to the final forecast of US$938m by 2022. This leads to an EPS of $8.29 in the final year of projections relative to the current EPS of $4.88. Analysts are predicting this high revenue growth to squeeze profit margins over time, from 30% to 30% by the end of 2022.

Next Steps:

Future outlook is only one aspect when you're building an investment case for a stock. For Air Lease, I've put together three key aspects you should further examine:

  1. Financial Health: Does it have a healthy balance sheet? Take a look at our free balance sheet analysis with six simple checks on key factors like leverage and risk.
  2. Future Earnings: How does Air Lease's growth rate compare to its peers and the wider market? Dig deeper into the analyst consensus number for the upcoming years by interacting with our free analyst growth expectation chart.
  3. Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Air Lease? Explore our interactive list of stocks with large growth potential to get an idea of what else is out there you may be missing!

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.