Revisiting Air Lease’s Valuation After New Airbus Deliveries and Ongoing Growth Momentum

If you have been watching Air Lease (AL), the recent announcement might have caught your eye. The company just delivered two more Airbus A321-200neo aircraft to China Airlines, bringing the count to eight new A321neos leased to the carrier. These long-term leases are significant in a global aviation landscape where airline customers are modernizing their fleets and responding to a steady pickup in travel demand. For Air Lease, consistent delivery activity like this not only strengthens key relationships with airlines but also adds visible contracted revenue to its orderbook. This news comes at a time when Air Lease’s stock has already experienced momentum. Shares are up 33% over the past year, which is well ahead of the broader US market. They have posted a 25% return so far in 2025. Long-term investors have seen the price more than double over five years. Recent stock strength has occurred alongside a mix of positive earnings surprises, upward revisions to earnings estimates, and several incremental deals that indicate healthy demand for next-generation, fuel-efficient aircraft. With all this in mind, the key question is whether Air Lease’s current price offers an attractive entry. Is this an undervalued opportunity, or is the market pricing in further growth ahead?

Most Popular Narrative: 8.6% Undervalued

According to community narrative, Air Lease is currently considered undervalued, with analysts projecting a fair value that is noticeably higher than the current share price. This narrative is based on future expectations around revenue growth, profit margins, and market dynamics within the aircraft leasing industry.

Airlines' growing preference for leasing over ownership, driven by a need for capital flexibility and balance sheet optimization, continues to expand Air Lease's addressable market. This is evident in high placement rates (100% through 2026), strong lease extensions, and long average lease terms. These factors contribute to recurring revenue and steady earnings growth.

What is fueling this bullish outlook? The key behind the valuation is a combination of revenue growth, margin changes, and how much investors are willing to pay for future profits. The notable aspect is that the full calculation assumes changes that could position Air Lease differently compared to its peers. Interested in the specific financial shifts that support a higher price? The numbers behind this assessment might offer a new perspective on the industry.

Result: Fair Value of $65.67 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts. However, persistent supply delays or an unexpected rise in financing costs could quickly challenge the bullish case for Air Lease’s future earnings growth. Find out about the key risks to this Air Lease narrative.

Another View: Discounted Cash Flow Tells a Different Story

While the fair value estimate relies on future earnings and market multiples, our DCF model takes a closer look at long-term cash flow projections. In this case, it signals that the shares might be overvalued. This could suggest the market is looking too far ahead.

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 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 reach your own conclusions, you can analyze the figures and shape your own story in just minutes. do it your way.

A great starting point for your Air Lease research is our analysis highlighting 3 key rewards and 3 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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