The firm said it started the aircraft leasing company out with the rating based on its belief earnings per share growth is going to slow down.
UBS set a $42 price target on the stock.
Separately, TheStreet Ratings team rates AIR LEASE CORP as a Hold with a ratings score of C+. TheStreet Ratings Team has this to say about their recommendation:
"We rate AIR LEASE CORP (AL) a HOLD. The primary factors that have impacted our rating are mixed some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its robust revenue growth, solid stock price performance and impressive record of earnings per share growth. However, as a counter to these strengths, we find that the company has favored debt over equity in the management of its balance sheet."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The revenue growth came in higher than the industry average of 2.5%. Since the same quarter one year prior, revenues rose by 21.2%. Growth in the company's revenue appears to have helped boost the earnings per share.
- Powered by its strong earnings growth of 50.00% and other important driving factors, this stock has surged by 40.26% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the stock's future course, our hold rating indicates that we do not recommend additional investment in this stock despite its gains in the past year.
- The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. In comparison to the other companies in the Trading Companies & Distributors industry and the overall market, AIR LEASE CORP's return on equity is significantly below that of the industry average and is below that of the S&P 500.
- The debt-to-equity ratio is very high at 2.30 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company.
- You can view the full analysis from the report here: AL Ratings Report