AerSale rated Buy as Truist starts coverage of aviation services firm
MachineHeadz/iStock via Getty Images
AerSale (NASDAQ:ASLE) on Friday was rated as a Buy by analysts Truist Securities who initiated research on the aviation products and services provider.
“The company provides global airlines with more cost-efficient solutions targeted at mid-life assets and we believe that the AerSale (ASLE) operating model has the ability to drive growth in both up and down markets,” Michael Ciarmoli, analyst at Truist, said in the Dec. 2 report. “The company will benefit from an ongoing recovery for global passenger traffic, driving increased need for fleet maintenance and acquisition of parts.”
AerSale (ASLE) was founded in 2008 as a private company and went public two years ago through a merger with a special purpose acquisition company (SPAC). SPACs are shell companies that raise money from investors and trade in public markets with the singular goal of merging with a private company to take public.
Truist forecasts that AerSale’s (ASLE) revenue will grow 29% from a year earlier to $438.6 million for 2022, and by 9.5% to $480.3 million for 2023. The company’s EPS will expand 6.6% from $1.22 this year to $1.30, Truist estimate.
AerSale (ASLE) trades at a fiscal year two P/E multiple of 13.6 times, a discount to the peer median of 21.3 times, and at a fiscal year two EV / EBITDA multiple of 6.7 times, a discount to the peer median of 12.2 times, according to Truist.
“We believe the discounted valuation stems from the lumpy nature of the business model, limited liquidity and lack of Street coverage,” the report said. Truist has price target of $19 a share for AerSale (ASLE), based on an enterprise value-to-EBITDA multiple of about 10 times estimated EBITDA of $116 million in 2024.
AerSale’s (ASLE) stock fell 13% to close at $15.49 a share on Nov. 16, when the company said certain shareholders planned a secondary offering of 4 million common stock shares. Since then, shares have risen about 5% to trade at $16.31 as of 12:32 p.m. ET on Dec. 2.