Here's Why You Should Avoid Investing in Air Lease Stock Right Now

Air Lease Corporation (AL) is currently mired in multiple headwinds, which, we believe, have made it an unimpressive investment option.Let’s delve deeper.Unimpressive Price Performance: Air Lease has gained 17% so far this year but underperformed its industry’s surge of 48%.YTD Price ComparisonImage Source: Zacks Investment ResearchWeak Zacks Rank: Air Lease currently carries a Zacks Rank #4 (Sell).Southward Earnings Estimate Revision: The Zacks Consensus Estimate for fourth-quarter 2024 earnings has been revised 13% downward over the past 90 days. For 2024, the consensus mark for earnings has moved 8.6% south in the same time frame. The bearish alterations in estimate revisions underscore a notable decline in brokers' confidence in the stock.Earnings Expectations: Downbeat earnings expectations cast a shadow over a company’s prospects. For fourth-quarter 2024, AL’s earnings are expected to decline 38.10% year over year. For 2024, AL’s earnings are expected to decline 3.7% year over year.Other Headwinds: Air Lease is currently facing multiple headwinds, such as higher interest expenses, a rise in operating expenses and a debt-laden balance sheet. Let’s discuss them in detail.Higher interest expenses due to an increase in the composite cost of funds and overall outstanding debt balance are hurting Air Lease’s bottom line. AL anticipates its interest expenses to continue to increase as its average debt balance outstanding increases with the growth of its fleet.Rising operating expenses (due to higher selling, general and administrative expenses; interest expenses and depreciation of flight equipment costs) pose a threat to the company's bottom line. During 2023, operating expenses rose 18.6% to $1.99 billion. In the first nine months of 2024, operating expenses rose 9.8% year over year to $1.63 billion.Air Lease’s liquidity position is a concern. Cash and cash equivalents of $460.78 million at the end of the third quarter of 2024 were lower than the $20.16 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. AL’s high debt levels are concerning. Long-term debt increased to $20.1 billion at the third quarter of 2024-end from $18.6 billion in the year-ago quarter.Stocks to ConsiderSome better-ranked stocks from the Zacks Transportation sector are Expeditors International of Washington, Inc. (EXPD) and Wabtec Corporation WAB. Each stock presently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.EXPD has an impressive earnings surprise history. The company's earnings outpaced the Zacks Consensus Estimate in two of the trailing four quarters (missed the mark in the remaining quarter and met in the other quarter), delivering an average surprise of 4.75%.The Zacks Consensus Estimate for EXPD’s 2024 earnings has been revised 6.4% upward over the past 90 days. EXPD has an expected earnings growth rate of 8.38% for 2024. Shares of EXPD have plunged 4.5% so far this year.WAB has an impressive earnings surprise history. The company's earnings outpaced the Zacks Consensus Estimate in three of the trailing four quarters (missed the mark in the remaining quarter), delivering an average surprise of 9.46%.The Zacks Consensus Estimate for WAB’s 2024 earnings has been revised 2.5% upward over the past 90 days. WAB has an expected earnings growth rate of 28.55% for 2024. Shares of WAB have gained 57.4% so far this year.Free Today: Profiting from The Future’s Brightest Energy SourceThe demand for electricity is growing exponentially. At the same time, we’re working to reduce our dependence on fossil fuels like oil and natural gas. Nuclear energy is an ideal replacement.Leaders from the US and 21 other countries recently committed to TRIPLING the world’s nuclear energy capacities. This aggressive transition could mean tremendous profits for nuclear-related stocks – and investors who get in on the action early enough.Our urgent report, Atomic Opportunity: Nuclear Energy's Comeback, explores the key players and technologies driving this opportunity, including 3 standout stocks poised to benefit the most.Download Atomic Opportunity: Nuclear Energy's Comeback free today.Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Expeditors International of Washington, Inc. (EXPD): Free Stock Analysis Report Air Lease Corporation (AL): Free Stock Analysis Report Westinghouse Air Brake Technologies Corporation (WAB): Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks