Financial Review: AerCap (AER) versus Its Competitors

AerCap (NYSE: AER) is one of 16 public companies in the “Equipment rental & leasing, not elsewhere classified” industry, but how does it weigh in compared to its peers? We will compare AerCap to related businesses based on the strength of its earnings, analyst recommendations, valuation, profitability, dividends, institutional ownership and risk.

Analyst Recommendations

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This is a summary of recent ratings for AerCap and its peers, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
AerCap 1 2 7 0 2.60
AerCap Competitors 83 403 635 50 2.56

AerCap currently has a consensus price target of $60.22, suggesting a potential upside of 15.13%. As a group, “Equipment rental & leasing, not elsewhere classified” companies have a potential upside of 24.53%. Given AerCap’s peers higher probable upside, analysts clearly believe AerCap has less favorable growth aspects than its peers.

Valuation & Earnings

This table compares AerCap and its peers top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Net Income Price/Earnings Ratio
AerCap $5.04 billion $1.08 billion 8.26
AerCap Competitors $1.49 billion $248.94 million -1.27

AerCap has higher revenue and earnings than its peers. AerCap is trading at a higher price-to-earnings ratio than its peers, indicating that it is currently more expensive than other companies in its industry.

Volatility and Risk

AerCap has a beta of 1.81, indicating that its share price is 81% more volatile than the S&P 500. Comparatively, AerCap’s peers have a beta of 1.87, indicating that their average share price is 87% more volatile than the S&P 500.

Profitability

This table compares AerCap and its peers’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
AerCap 21.36% 12.31% 2.56%
AerCap Competitors 4.16% 3.30% -0.57%

Insider & Institutional Ownership

84.6% of AerCap shares are held by institutional investors. Comparatively, 58.2% of shares of all “Equipment rental & leasing, not elsewhere classified” companies are held by institutional investors. 14.1% of shares of all “Equipment rental & leasing, not elsewhere classified” companies are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Summary

AerCap beats its peers on 9 of the 13 factors compared.

AerCap Company Profile

AerCap Holdings N.V., an aircraft leasing company, engages in the lease, financing, sale, and management of commercial aircraft and engines in Mainland China, Hong Kong, Macau, the United States, Ireland, and internationally. The company provides aircraft asset management services, including remarketing aircraft; collecting rental and maintenance rent payments, monitoring aircraft maintenance, monitoring and enforcing contract compliance, and accepting delivery and redelivery of aircraft; and conducting ongoing lessee financial performance reviews. Its aircraft asset management services also comprise periodically inspecting the leased aircraft; coordinating technical modifications to aircraft to meet new lessee requirements; conducting restructuring negotiations in connection with lease defaults; repossessing aircraft; arranging and monitoring insurance coverage; registering and de-registering aircraft; arranging for aircraft and aircraft engine valuations; and providing market research services. In addition, the company offers cash management services, including treasury services, such as the financing, refinancing, hedging, and ongoing cash management of vehicles; and administrative services comprising accounting and secretarial services consisting of the preparation of budgets and financial statements, and liaising with the rating agencies. Further, it provides engine leasing; certified aircraft engines, airframes, and engine parts; and supply chain solutions. Additionally, the company sells airframe parts to airlines, maintenance, and repair and maintenance service providers, as well as aircraft parts distributors. As of December 31, 2017, it owned and managed a fleet of 1,531 aircraft. AerCap Holdings N.V. was founded in 1995 and is headquartered in Dublin, Ireland.

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