Is It Too Late To Consider Air Lease (AL) After Strong Three Year Share Gains?

• If you are asking whether Air Lease is still fairly priced after its recent run, this article will walk through what the numbers are saying about the stock's value today.
• The share price is at US$64.21, with returns of around 0.0% over 7 days, 0.2% over 30 days, 0.1% year to date, 38.0% over 1 year and 59.8% over 3 years. These figures can shape how investors think about both opportunity and risk.
• Recent coverage around aircraft lessors has focused on leasing demand, airline capacity decisions and ongoing fleet renewal. All of these factors affect how investors look at companies like Air Lease. These themes help frame whether the recent 1 year and 3 year returns are being treated as justified by fundamentals or driven more by changing sentiment.
• On our valuation checks, Air Lease scores 3 out of 6, and you can see the detailed breakdown in our valuation score. Next, we will compare different ways of assessing value and finish by highlighting a tool that can give you an even clearer picture of where the stock stands.

Air Lease delivered 38.0% returns over the last year. See how this stacks up to the rest of the Trade Distributors industry.

Approach 1: Air Lease Dividend Discount Model (DDM) Analysis

The Dividend Discount Model estimates what a share could be worth by projecting future dividends and growing them at a steady rate, then discounting those payments back to today.

For Air Lease, the model uses a dividend per share of US$0.91, a return on equity of 7.97% and a payout ratio of 22.17%. That payout level suggests the current dividend is covered by earnings with room left inside the business. The DDM growth rate is set at 3.26%, capped from an initial 6.20% input, while the broader expected growth input is 6.20%. These assumptions are applied to Air Lease’s dividend stream to arrive at an intrinsic value estimate.

On this basis, the model suggests a fair value of about US$16.01 per share, compared with the current market price of US$64.21. That gap implies the shares screen as very expensive on this particular dividend based approach, with the DDM indicating the stock is roughly 301.1% overvalued.

Result: OVERVALUED

Our Dividend Discount Model (DDM) analysis suggests Air Lease may be overvalued by 301.1%. Discover 884 undervalued stocks or create your own screener to find better value opportunities.

Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for Air Lease.

Approach 2: Air Lease Price vs Earnings (P/E)

For a profitable company, the P/E ratio is a useful way to see how much investors are paying for each dollar of earnings. It ties the share price directly to the bottom line, which is usually what shareholders care about most.

What counts as a “normal” P/E depends on how the market views a company’s growth outlook and risk. Higher growth or lower perceived risk can justify a higher multiple, while slower growth or higher risk often comes with a lower one.

Air Lease trades on a P/E of 7.42x. That sits well below the Trade Distributors industry average of 21.21x and also below the peer group average of 27.22x. Simply Wall St’s Fair Ratio for Air Lease is 12.34x, which reflects what investors might expect to pay given factors like its earnings profile, industry, profit margin, market cap and risk characteristics.

The Fair Ratio is more tailored than a simple peer or industry comparison because it adjusts for the company’s own fundamentals rather than assuming it should trade exactly in line with others.

Compared with this Fair Ratio, Air Lease’s current P/E of 7.42x screens as lower, which points to the shares looking undervalued on this earnings based view.

Result: UNDERVALUED

P/E ratios tell one story, but what if the real opportunity lies elsewhere? Discover 1444 companies where insiders are betting big on explosive growth.

Upgrade Your Decision Making: Choose your Air Lease Narrative

Earlier we mentioned that there is an even better way to understand valuation. On Simply Wall St you can use Narratives, where you write the story you believe about Air Lease, link that story to your own revenue, earnings and margin forecasts, see the fair value that drops out of those numbers, and then compare it with the current share price to help inform your decision. Everything updates automatically when news or earnings arrive. For example, one investor on the Community page might build a Narrative that justifies a fair value near the higher analyst target of US$72.00 based on strong lease demand and a young, fuel efficient fleet. Another might anchor closer to the US$50.00 low target because they focus more on rising financing costs, non recurring insurance gains and geopolitical risks. Both views sit side by side so you can quickly see which story and fair value feel closer to your own assumptions.

Do you think there's more to the story for Air Lease? Head over to our Community to see what others are saying!

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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