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Air Lease Corporation (AL) performed well in the past year and has the potential to sustain the momentum in the future.

Let’s look at the factors why investors should retain this stock.

Factors Favoring Air Lease

Air Lease's top line is benefiting from the continuous growth in its fleet and an increase in sales activity. In the first quarter of 2024, AL's top line improved 4.27% year over year. As of Mar 31, 2024, Air Lease’s fleet included 472 owned aircraft and 73 managed aircraft, and it had commitments to purchase 320 aircraft from Boeing and Airbus for delivery through 2028.

Air Lease has an impressive earnings surprise history. The company's earnings outpaced the Zacks Consensus Estimate in three of the trailing four quarters (missing the mark in the remaining quarter), delivering an average surprise of 15.63%.

Consistent shareholder-friendly moves instill investor confidence and positively impact the company's bottom line. Shares of Air Lease have gained 19.1% in the past six months, outperforming the 16.1% rise of the industry it belongs to.

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Key Risks

Rising operating expenses due to higher interest expenses and depreciation of flight equipment costs pose a threat to the company's bottom line. In first-quarter 2024, operating expenses rose 10.5% year over year to $528 million.

Air Lease’s liquidity position remains a concern. Cash and cash equivalent of $554.37 million at the first quarter of 2024-end was lower than the $19.5 billion of debt financing and net of discount and issuance costs. This implies that the company does not have enough cash to meet its debt burden.

Air Lease’s return-on-equity (ROE) is pegged at 9.1%, below the industry’s level of 11.4%. Lower ROE indicates less efficiency in utilizing the equity capital.

Zacks Rank and Stocks to Consider

AL currently carries a Zacks Rank #3 (Hold).

A couple of better-ranked stocks for investors’ consideration in the Zacks Transportation sector include SkyWest, Inc. (SKYW) and United Airlines Holdings, Inc. UAL. Each stock currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

SKYW flaunts a VGM Score of A and has a market capitalization of $3.28 billion. The Zacks Consensus Estimate for SKYW’s 2024 earnings per share (EPS) has moved up 6.9% in the past 90 days. Shares of SKYW have surged 58.5% year to date.

SKYW’s expected growth rate for 2024 is more than 100%. SKYW has a trailing four-quarter earnings surprise of 128.09%, on average.

UAL currently flaunts a VGM Score of A. The Zacks Consensus Estimate for UAL 2024 EPS has moved up 2.2% in the past 90 days. UAL has a trailing four-quarter earnings surprise of 32.34%, on average.

Shares of UAL have rallied 13.5% year to date.

Zacks Names "Single Best Pick to Double"

From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.

It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.

This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.