Results: AerSale Corporation Beat Earnings Expectations And Analysts Now Have New Forecasts

It's been a mediocre week for AerSale Corporation (NASDAQ:ASLE) shareholders, with the stock dropping 17% to US$17.12 in the week since its latest annual results. AerSale missed revenue estimates by 6.4%, with sales of US$409m, although statutory earnings per share (EPS) of US$0.83 beat expectations, coming in 7.8% ahead of analyst estimates. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

See our latest analysis for AerSale

Taking into account the latest results, the current consensus from AerSale's four analysts is for revenues of US$479.5m in 2023, which would reflect a solid 17% increase on its sales over the past 12 months. Statutory per share are forecast to be US$0.85, approximately in line with the last 12 months. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$495.7m and earnings per share (EPS) of US$1.04 in 2023. The analysts seem less optimistic after the recent results, reducing their sales forecasts and making a substantial drop in earnings per share numbers.

Despite the cuts to forecast earnings, there was no real change to the US$21.50 price target, showing that the analysts don't think the changes have a meaningful impact on its intrinsic value. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. There are some variant perceptions on AerSale, with the most bullish analyst valuing it at US$23.00 and the most bearish at US$20.00 per share. The narrow spread of estimates could suggest that the business' future is relatively easy to value, or thatthe analysts have a strong view on its prospects.

Of course, another way to look at these forecasts is to place them into context against the industry itself. The analysts are definitely expecting AerSale's growth to accelerate, with the forecast 17% annualised growth to the end of 2023 ranking favourably alongside historical growth of 14% per annum over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 6.2% per year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect AerSale to grow faster than the wider industry.

The Bottom Line

The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. Regrettably, they also downgraded their revenue estimates, but the latest forecasts still imply the business will grow faster than the wider industry. The consensus price target held steady at US$21.50, with the latest estimates not enough to have an impact on their price targets.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have forecasts for AerSale going out to 2024, and you can see them free on our platform here.

Don't forget that there may still be risks. For instance, we've identified 1 warning sign for AerSale that you should be aware of.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.