Air Lease (AL): Evaluating Current Valuation After a Year of Strong Gains

Air Lease (AL) shares have been relatively steady over the month, showing mild movement despite a generally upbeat year for the stock. Investors have kept an eye on performance, remaining curious about factors shaping the broader trajectory.

See our latest analysis for Air Lease.

After a year of impressive gains, Air Lease’s momentum shows few signs of slowing. The share price has climbed 32.97% year-to-date, with the latest close at $63.77. Its total shareholder return over the past twelve months stands at a robust 42.53%. Three- and five-year total returns are even stronger, highlighting steady performance and investor confidence despite shifting market sentiment.

If you’re thinking about what else could be gaining traction, now is a great moment to broaden your search and discover fast growing stocks with high insider ownership

This strong performance prompts an important question for investors: Is Air Lease still undervalued, or has the market already priced in the company’s future growth? Could there be further upside, or is caution warranted?

Most Popular Narrative: 4.3% Undervalued

Air Lease’s most widely tracked narrative sets fair value at $66.67, slightly above the current close. This suggests analysts see limited but meaningful upside, grounded in detailed projections of how global demand and industry change could power further gains.

The trend towards stricter environmental regulations and airline fleet renewal is supporting higher demand for next-generation, fuel-efficient aircraft. Air Lease's young fleet positions it to capitalize on this shift, enabling premium pricing on leases and improved net margins as airlines seek to reduce emissions and replace older jets.

Read the complete narrative.

Curious what powers this premium valuation? It is not just about growth; it is the narrative’s bold financial projections for Air Lease’s future revenue mix, margins, and a surprisingly elevated profit multiple. See what supports these expectations inside.

Result: Fair Value of $66.67 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, rising financing costs and uncertainty over nonrecurring insurance gains could challenge Air Lease’s earnings outlook and may temper analyst confidence in near-term growth.

Find out about the key risks to this Air Lease narrative.

Another View: Discounted Cash Flow Model Differs Sharply

While the analyst consensus sees Air Lease as undervalued, our DCF model paints a starker picture. It suggests the current share price is well above estimated fair value. This may indicate that much of the growth and optimism is already reflected in the price. What should investors make of this split perspective?

Look into how the SWS DCF model arrives at its fair value.

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out Air Lease for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover 854 undervalued stocks based on their cash flows. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.

Build Your Own Air Lease Narrative

If you see things differently or want to dive into the numbers yourself, you can put together your own perspective in just a few minutes. Do it your way.

A great starting point for your Air Lease research is our analysis highlighting 3 key rewards and 4 important warning signs that could impact your investment decision.

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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.

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