FTAI Aviation's Growth Prospects 'Underappreciated' Amid Rising Demand for Engine Maintenance, Morgan Stanley Says

11:45 AM EDT, 08/16/2024 (MT Newswires) -- FTAI Aviation's (FTAI) growth prospects are "underappreciated" by the market as the company remains well-positioned to benefit from rising demand for engine maintenance, Morgan Stanley said in a note Friday.

The company is also benefiting from cost-saving approvals from the Federal Aviation Administration, the analysts said, adding that they expect the company's adjusted earnings before interest, taxes, depreciation, and amortization to grow by around 36% in 2024, with even higher growth in their aerospace products.

The analysts said FTAI's large engine inventory and fast maintenance service are likely to attract and keep customers. By focusing on the existing fleet, the company avoids risks associated with new aircraft programs. The V2500 MRE program and new Parts Manufacturer Approval, or PMA, approvals offer further growth opportunities.

"FTAI Aviation is a relatively under the radar aviation leasing and Maintenance, Repair, and Overhaul company with positive optionality on Parts Manufacturer Approval in the hot section of the jet engine. FTAI built a unique business model to allow the company to maximize profits in arguably the most attractive part of the aerospace aftermarket today: the CFM-56 jet engine," the analysts said.

Morgan Stanley moved the company to its top pick in Aerospace. The firm raised FTAI's price target to $140 from $105 while keeping its overweight rating.

Price: 112.26, Change: +5.82, Percent Change: +5.47