Is AerCap Holdings (AER) Setting Up for a Breakout?

AerCap Holdings NV (AER) is an aircraft leasing company. Its major activities include leasing, financing, sales, and management of commercial aircraft and engines. They also provide aircraft asset management and corporate services to securitization vehicles, joint ventures, and other third parties…

In AerCap Holdings’ (AER) most recent quarter end, its earnings beat expectations and rose 24.5% year over year. This was due to a rapid recovery in air travel in many of the world’s major markets. This led to increased demand for AER’s aircraft and an increase in its cash flows. Management is highly optimistic that the global leasing environment will continue to rebound in the months ahead.

At the end of June, the company had $11.4 billion in cash compared to no short-term debt. AER also has a gross margin of 55%, which is much higher than the industry average of 18.6%. Analysts forecast earnings to rise 182.1% for the year.

The stock appears undervalued with a trailing P/E of 3.02 and a forward P/E of 9.34. AER has shown bullish momentum since mid-July as shown in the chart below. This has led to a Momentum Grade of B in our POWR Ratings system.

Take a look at the 1-year chart of AER below with added notations…

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