AerCap Holdings N.V.

AER ·Industrials, Specialty Business Services
Valuation › AI Valuation

AI Valuation

AI-generated fair value estimate for this company.

AI Fair Value $170.00
Market Price $145.92
Undervalued By 14.2%

Method: Justified price-to-book / residual-income model (appropriate for an asset-heavy leasing financial): book value $119.21/share; normalized through-cycle ROE 14% (below the current cyclically elevated 18.7% TTM ROE); 11% cost of equity (aviation-cycle/credit risk); 4% long-run growth; Justified P/B = (0.14-0.04)/(0.11-0.04) = 1.43x, 1.43 times $119.21 ~$170.3/share.

Reasoning: AerCap's reported FCF is structurally distorted by lumpy, debt-matched aircraft purchases (TTM FCF is -$307M despite $3.39B net income and $5.62B operating cash flow), making a naive unlevered FCF DCF unreliable; leasing/financial companies are conventionally valued on sustainable ROE versus cost of equity applied to book value instead.