On Friday, TD Cowen adjusted its outlook on AerSale (NASDAQ:ASLE), a provider of aftermarket aircraft, engines, and OEM (original equipment manufacturer) used serviceable material. The firm lowered the price target to $7.00 from the previous $14.00 while keeping a Market Perform rating on the stock.
The revision followed AerSale's fourth-quarter performance, which saw both sales and EBITDA (earnings before interest, taxes, depreciation, and amortization) fall short of expectations. Sales and EBITDA missed the anticipated figures by approximately 40% and 80%, respectively. This shortfall continues AerSale's trend of negative revisions.
TD Cowen did not provide guidance for the calendar year 2024. However, the new price target of $7.00 is based on an approximate 14 times the estimated EV/EBITDA (enterprise value/earnings before interest, taxes, depreciation, and amortization) for that year.
The firm's assessment reflects the recent financial results and the absence of forward-looking guidance from AerSale, which could be a critical factor for investors trying to gauge the company's future performance.
This price target adjustment is significant as it represents a 50% decrease from the previous target, signaling a more conservative valuation of AerSale's stock by TD Cowen. The Market Perform rating indicates that the firm does not predict the stock will outperform, underperform, or perform in line with the broader market in the near term.
InvestingPro Insights
In light of TD Cowen's revised outlook on AerSale (NASDAQ:ASLE), it's worth noting additional insights from InvestingPro. AerSale's management has been actively engaging in share buybacks, which can be a sign of confidence in the company's value. Moreover, three analysts have recently revised their earnings estimates upward for the upcoming period, potentially indicating an optimistic view on AerSale's financial prospects.
From a data perspective, AerSale's market capitalization stands at $397.16 million, with a high adjusted price-to-earnings (P/E) ratio over the last twelve months of 88.47, reflecting a premium valuation by the market. The company's revenue for the same period was $335.21 million, although it experienced a notable decline in revenue growth of -22.08%. Despite the challenges, AerSale's stock has seen a price total return of 4.21% over the past month, suggesting some recovery despite a significant drop of -45.38% over the past year.
These metrics and InvestingPro Tips, such as AerSale's aggressive share buybacks and the recent positive earnings revisions, could be critical for investors weighing the potential risks and rewards of investing in AerSale's stock. For a more in-depth analysis and additional InvestingPro Tips, visit https://www.investing.com/pro/ASLE and consider using the coupon code PRONEWS24 to get an extra 10% off a yearly or biyearly Pro and Pro+ subscription. In total, there are 15 additional InvestingPro Tips available that can provide further guidance on AerSale's financial health and stock performance.
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