Equity Long-Short

Mo Aziz

Thematic (Sector/Industry)

<ul>
<li>An excellent article by Keith Mwanalushi in Aviation Week Network is a must read, here is the link <a href="https://aviationweek.com/mro/supply-chain/engine-supply-chain-experiences-shifting-pain-points" target="_blank" rel="noopener">Engine Supply Chain Experiences Shifting Pain Points | Aviation Week Network  </a>
</li>
<li>Underpins our thesis that engine issues disrupt aircraft supply, pushing lease rates higher - especially on aircraft coming off leases, and for spare engines </li>
<li>
<a href="https://www.smartkarma.com/entities/ftai-aviation-ltd" target="_blank" data-smartkarma-citation="entities:28793:1" rel="noopener">FTAI Aviation (FTAI US)</a> is the prime beneficiary with a portfolio of engines followed by <a href="https://www.smartkarma.com/entities/aercap-holdings-nv" target="_blank" data-smartkarma-citation="entities:28083:1" rel="noopener">AerCap Holdings NV (AER US)</a> with engines and mid-life aircraft coming off leases</li>
</ul>


An excellent article by Keith Mwanalushi in Aviation Week Network is a must read, here is the link Engine Supply Chain Experiences Shifting Pain Points | Aviation Week Network  

Underpins our thesis that engine issues disrupt aircraft supply, pushing lease rates higher - especially on aircraft coming off leases, and for spare engines 

FTAI Aviation (FTAI US) is the prime beneficiary with a portfolio of engines followed by AerCap Holdings NV (AER US) with engines and mid-life aircraft coming off leases


Engine Supply Chain Experiences Shifting Pain Points

Event-Driven

<ul>
<li>General Electric intends to offload its entire shareholding via a secondary offer, a positive development as it removes the share overhang</li>
<li>Opportune time to own Aercap as aircraft is in high demand and supply chain disruptions mean limited supply over the medium-term, ensuring high lease rates and strong profits </li>
<li>BUY with target price of $81.45 (+21% UPSIDE) pegged to FY24 P/BV of 0.94x, Aercap is the best in the pack with superior net lease margin, finance cost, and ROE     </li>
</ul>


General Electric intends to offload its entire shareholding via a secondary offer, a positive development as it removes the share overhang
Opportune time to own Aercap as aircraft is in high demand and supply chain disruptions mean limited supply over the medium-term, ensuring high lease rates and strong profits 
BUY with target price of $81.45 (+21% UPSIDE) pegged to FY24 P/BV of 0.94x, Aercap is the best in the pack with superior net lease margin, finance cost, and ROE     


Aercap Secondary Offer: Overhang No More and It Is Cheap, BUY

Independent research on the U.S. markets, Baptista Research

Baptista Research

Independent research on the U.S. markets

Baptista Research is an independent financial research house focused on the U.S. markets. We provide equity research as well as credit research reports on the top-listed U.S. companies with most of our focus on technology, consumer goods and services, automobiles, industrials, oil and gas, pharma, and healthcare. Our research has served more than 3000 institutional investors including mutual funds, hedge funds, banks, family offices, and various buy-side firms. We operate a research subscription service where institutions, as well as retail investors, can have priority access to all our research. We also have a wide distribution of our research reports across some of the top global financial platforms. Apart from equity research and credit research, we also provide advisory services with respect to mergers & acquisitions (M&A), private equity/ venture capital fundraising, valuation reports, and investment management services for corporates.
Baptista Research is owned and managed by Ishan Majumdar, an ex-Venture Capitalist/ Investment Banker, a Chartered Accountant, and a Masters’ degree holder in Management from HEC Paris. Ishan has nearly a decade of experience in Mergers and Acquisitions, Leveraged Buyouts (LBOs), Venture Capital Investing, Corporate Strategy, and Valuation in front-office roles at the likes of BNP Paribas CIB, Credit Agricole CIB, Groupe Danone, and TIW Private Equity. He has worked on and closed multiple acquisition deals, leveraged buyouts, and start-up investment transactions.

Equity Bottom-Up

<ul><li>The financial results for AerCap Holdings N.V. in the second quarter of 2026 indicate continued operational momentum and financial strength amid a supportive industry backdrop.</li><li>AerCap reported adjusted earnings per share of $5.14 and an adjusted return on equity of 18%, supported by $1.5 billion in operating cash flow.</li><li>The company achieved a lease extension rate on passenger aircraft of 85%, above its long-term average, and completed $1.4 billion in asset sales with a gain-on-sale margin of 20%, reflecting favorable supply-demand dynamics in aircraft leasing.</li></ul>

The financial results for AerCap Holdings N.V. in the second quarter of 2026 indicate continued operational momentum and financial strength amid a supportive industry backdrop.AerCap reported adjusted earnings per share of $5.14 and an adjusted return on equity of 18%, supported by $1.5 billion in operating cash flow.The company achieved a lease extension rate on passenger aircraft of 85%, above its long-term average, and completed $1.4 billion in asset sales with a gain-on-sale margin of 20%, reflecting favorable supply-demand dynamics in aircraft leasing.

AerCap Holdings Orders 15 Boeing 787s To Capture Scarce Wide-Body Demand!

<ul>
<li>This report explains the nuts and bolts of the aircraft leasing industry in a simple manner, along with its opportunities, risks, and business outlook.  </li>
<li>We are in a golden era, underpinned by strong global traffic recovery, and supply shortage due to technical and manufacturer snafus. Airlines are also increasingly struggling to access credit. </li>
<li>
<a href="https://www.smartkarma.com/entities/aercap-holdings-nv" target="_blank" data-smartkarma-citation="entities:28083:1" rel="noopener">AerCap Holdings NV (AER US)</a> is our top pick on its superior business profile and attractive valuation, the second choice is <a href="https://www.smartkarma.com/entities/boc-aviation" target="_blank" data-smartkarma-citation="entities:22689:1" rel="noopener">BOC Aviation (2588 HK). </a>
</li>
</ul>


This report explains the nuts and bolts of the aircraft leasing industry in a simple manner, along with its opportunities, risks, and business outlook.  
We are in a golden era, underpinned by strong global traffic recovery, and supply shortage due to technical and manufacturer snafus. Airlines are also increasingly struggling to access credit. 

AerCap Holdings NV (AER US) is our top pick on its superior business profile and attractive valuation, the second choice is BOC Aviation (2588 HK). 



Aircraft Leasing 101 - Heralding the Golden Era

<ul>
<li>
<a href="https://www.smartkarma.com/entities/aercap-holdings-nv" target="_blank" data-smartkarma-citation="entities:28083:1" rel="noopener">AerCap Holdings NV (AER US)</a> (AerCap) 2023 result was excellent; record core profit of USD2.4b, 27% ROE, and share buyback of USD2.6b of shares (~18% shares in issue) </li>
<li>Management guided continued growth in 2024 and announced a further USD500m share buyback (~3% shares in issue). We think it can easily beat this lowball target       </li>
<li>Poised for growth; aircraft lease rates and asset values are rising. Maintain BUY with higher TP of USD90.6 (+16% UPSIDE) pegged to FY24 P/BV of 0.94x (1SD above LT average)   </li>
</ul>



AerCap Holdings NV (AER US) (AerCap) 2023 result was excellent; record core profit of USD2.4b, 27% ROE, and share buyback of USD2.6b of shares (~18% shares in issue) 
Management guided continued growth in 2024 and announced a further USD500m share buyback (~3% shares in issue). We think it can easily beat this lowball target       
Poised for growth; aircraft lease rates and asset values are rising. Maintain BUY with higher TP of USD90.6 (+16% UPSIDE) pegged to FY24 P/BV of 0.94x (1SD above LT average)   


AerCap (AER US): Splendid 2023, More to Come in 2024

Ireland

AerCap Holdings NV is the world's largest aircraft leasing firm by fleet value, and is listed on the New York Stock Exchange (AER). It has its headquarters in Dublin with offices in Amsterdam, Los Angeles, Shannon, Fort Lauderdale, Singapore, Shanghai, Abu Dhabi, Seattle and Toulouse.

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AerCap Holdings NV (AER US)

Engine Supply Chain Experiences Shifting Pain Points

Engine supply chain issues are causing disruptions in the aircraft supply and driving up lease rates, benefiting FTAI Aviation and AerCap Holdings.

Mo Aziz

Aercap Secondary Offer: Overhang No More and It Is Cheap, BUY

The principal shareholder intends to sell its entire 14.5% stake, effectively removes share overhang. The leasing market is heading to a golden...

Mo Aziz

AerCap Holdings Orders 15 Boeing 787s To Capture Scarce Wide-Body Demand!

The financial results for AerCap Holdings N.V. in the second quarter of 2026 indicate continued operational momentum and financial strength amid a...

Baptista Research

Aircraft Leasing 101 - Heralding the Golden Era

Aircraft Leasing 101 is a quick and easy guide to the aircraft leasing industry. We are Bullish on Aercap and BOC Aviation, and you will be too...

Mo Aziz

AerCap (AER US): Splendid 2023, More to Come in 2024

AerCap reported a record 2023 financial performance. Expect more growth in 2024, with rising lease rates and asset values. Stock remains cheap,...

Mo Aziz

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Engine Supply Chain Experiences Shifting Pain Points

​Engine supply chain issues are causing disruptions in the aircraft supply and driving up lease rates, benefiting FTAI Aviation and AerCap Holdings.

Mo Aziz

Aercap Secondary Offer: Overhang No More and It Is Cheap, BUY

The principal shareholder intends to sell its entire 14.5% stake, effectively removes share overhang. The leasing market is heading to a golden...

Mo Aziz

AerCap Holdings Orders 15 Boeing 787s To Capture Scarce Wide-Body Demand!

The financial results for AerCap Holdings N.V. in the second quarter of 2026 indicate continued operational momentum and financial strength amid a...

Baptista Research

Aircraft Leasing 101 - Heralding the Golden Era

Aircraft Leasing 101 is a quick and easy guide to the aircraft leasing industry. We are Bullish on Aercap and BOC Aviation, and you will be too...

Mo Aziz

AerCap (AER US): Splendid 2023, More to Come in 2024

​AerCap reported a record 2023 financial performance. Expect more growth in 2024, with rising lease rates and asset values. Stock remains cheap,...

Mo Aziz

Engine supply chain issues are causing disruptions in the aircraft supply and driving up lease rates, benefiting FTAI Aviation and AerCap Holdings.

AerCap reported a record 2023 financial performance. Expect more growth in 2024, with rising lease rates and asset values. Stock remains cheap,...