AerCap Holdings N.V. (AER) | Investment Case

1. Company Snapshot

1.a. Company Description

AerCap Holdings N.V. engages in the lease, financing, sale, and management of commercial flight equipment in China, Hong Kong, Macau, the United States, Ireland, and internationally.The company offers aircraft asset management services, such as remarketing aircraft and engines; collecting rental and maintenance rent payments, monitoring aircraft maintenance, monitoring and enforcing contract compliance, and accepting delivery and redelivery of aircraft and engines; and conducting ongoing lessee financial performance reviews.Its aircraft asset management services also include periodically inspecting the leased aircraft; coordinating technical modifications to aircraft to meet new lessee requirements; conducting restructuring negotiations in connection with lease defaults; repossessing aircraft and engines; arranging and monitoring insurance coverage; registering and de-registering aircraft; arranging for aircraft and engine valuations; and providing market research services.

The company also provides cash management services, including treasury services, such as the financing, refinancing, hedging, and ongoing cash management of vehicles; and administrative services comprising accounting and corporate secretarial services consisting of the preparation of budgets and financial statements.In addition, it offers airframe and engine parts and supply chain solutions to airlines; maintenance, repair, and overhaul service providers; and aircraft parts distributors.As of December 31, 2021, the company had a portfolio of 2,369 owned, managed, or on order aircraft.

AerCap Holdings N.V. was founded in 1995 and is headquartered in Dublin, Ireland.

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1.b. Last Insights on AER

AerCap Holdings' recent performance was driven by strong Q3 results, with 19% revenue growth and a robust 28% gain on sale margin. The company's net spread margin reached an 8% five-year high. Its superior access to capital and preferred position in order books provide a credit advantage over airline customers. Additionally, share repurchases continue to add value, given asset sale premiums. Institutional investors, such as American Century Companies Inc. and HSBC Holdings PLC, have increased their positions in the company, citing its growth prospects.

1.c. Company Highlights

Last Price	148.13
Change Percentage	-2.14%
Open	150.78
Previous Close	151.37
Market Cap ( Millions)	25213
Volume	265296
Year High	154.94
Year Low	85.57
M A 50	144.66
M A 200	126.16

FCF Yield	-2.74%
Dividend Yield	0.73%
ROE	20.95%
Debt / Equity	237.76%
Net Debt / EBIDTA	699.21%
Price To Book	1.32
Price Earnings Ratio	6.47
Price To FCF	-36.45
Price To sales	3.14
EV / EBITDA	11.17

2. AerCap Holdings N.V. Posts Record Financial Performance

AerCap Holdings N.V. reported a record year in 2025 with exceptional financial and operating performance. The company achieved GAAP net income of $3.8 billion, or $21.3 per share, and adjusted net income of $2.7 billion, or $15.37 per share. Revenues reached an all-time high of $8.5 billion, while sales volumes totaled a record $3.9 billion. The company's fourth-quarter GAAP net income was $633 million or $3.79 per share, and adjusted net income was $660 million or $3.95 per share, beating analyst estimates of $3.31 per share.

Publication Date: 07:55

                                    📋 Highlights
                                    Record 2025 Financials:
                                                GAAP net income rose to $3.8B ($21.3/share), adjusted to $2.7B ($15.37/share), with revenues hitting $8.5B and operating cash flow at $5.4B.
Capital Returns:
                                                Shareholder returns totaled $2.6B in 2025 via $1B repurchase program and dividends, with a new $1B buyback announced for 2026.
Balance Sheet Strengthening:
                                                Net debt-to-equity dropped to 2.1x, and Fitch upgraded credit rating, reflecting improved financial stability.
2026 Guidance:
                                                Adjusted EPS projected at $12–$13/share, with $2B adjusted net income and $7.6B total revenue, driven by $6.7B lease rents.
High-Margin Asset Sales:
                                                Q4 saw $1.3B in sales revenue from 55 assets, achieving 24% unlevered gain on sale margin, consistent with historical performance.

                                

Financial Highlights

The company generated $5.4 billion of operating cash flow and had cash CapEx of $6.1 billion. AerCap returned $2.6 billion of capital to shareholders through the repurchase of approximately 22.1 million shares and quarterly dividends. The company's guidance for 2026 expects lease rents around $6.7 billion, maintenance revenues of around $700 million, and total revenue of around $7.6 billion, representing a revenue growth of 1.3% year-over-year, in line with analyst estimates.

Valuation and Capital Allocation

With a P/E Ratio of 6.62 and an ROE of 20.95%, AerCap's valuation suggests that the market is pricing in a certain level of growth. The company's ROIC of 4.75% indicates that it is generating returns above its cost of capital. AerCap's "barbell approach" to managing its portfolio, as described by Aengus Kelly, involves holding older technology assets nearing the end of their lifespan, while focusing on buying assets with durable demand, such as the A321 Neo and 787-9. This strategy aims to maximize returns while minimizing risk.

Operational Performance

The company strengthened its balance sheet, resulting in a credit rating upgrade from Fitch and a net debt to equity level of 2.1 times. AerCap's order book added 103 aircraft last year, and 281 brand new engines in the last two years. The company's excess capital position is high, with no significant deployment embedded in the 2026 guidance, and it plans to continue returning capital to shareholders through share repurchases and dividends.

Outlook and Risks

AerCap's guidance for 2026 expects cash CapEx of around $5.2 billion and asset sales of $2 billion to $3 billion. The company is well-positioned to navigate the challenges in the aviation industry, with a strong market position and a disciplined approach to capital allocation. However, the company faces risks related to airline financial weakness and potential systemic risk to aircraft lessors.

3. NewsRoom

The London Company Mid Cap Portfolio Q4 2025: Who Moved The Needle

Feb -16

Source: seekingalpha.com

Abbott Laboratories: A Key Reduction in Robert Bruce's Portfolio

Feb -13

Source: gurufocus.com

Donald Smith & Co's Strategic Moves: Equinox Gold Corp Sees a -2.9% Impact

Feb -12

Source: gurufocus.com

AerCap Holdings N.V. Announces 20-F Filing

Feb -12

Source: prnewswire.com

AerCap: Turning Used Aircraft Into A Strong Buyback Machine (Rating Upgrade)

Feb -11

Source: seekingalpha.com

Frontier Announces Fleet Optimization Transaction with AerCap

Feb -11

Source: prnewswire.com

Aercap Q4 Earnings Call Highlights

Feb -08

Source: defenseworld.net

AerCap Holdings N.V. (AER) Q4 2025 Earnings Call Transcript

Feb -06

Source: seekingalpha.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (10.50%)

6. Segments

Leasing, Financing, Sales and Management of Commercial Flight Equipment

Expected Growth: 10.5%

Strong demand for air travel, increasing aircraft deliveries, and growing need for fleet management services drive AerCap's growth, solidifying its position as a global aviation leader.

7. Detailed Products

Aircraft Leasing

AerCap provides aircraft leasing services to airlines, offering a range of aircraft types and lease terms to meet their fleet requirements.

Aircraft Trading

AerCap buys and sells aircraft, providing airlines and investors with opportunities to acquire or divest aircraft assets.

Aircraft Management

AerCap offers aircraft management services, including technical management, financial management, and administrative support.

Engine Leasing

AerCap provides engine leasing services, offering a range of engine types and lease terms to meet airline and MRO requirements.

Aircraft Financing

AerCap provides financing solutions for aircraft acquisitions, including debt and equity financing options.

8. AerCap Holdings N.V.'s Porter Forces

Forces Ranking

Threat Of Substitutes

AerCap Holdings N.V. operates in the aircraft leasing industry, where substitutes are limited. However, the company faces some threat from alternative financing options, such as debt financing, which could reduce the demand for leasing services.

Bargaining Power Of Customers

AerCap Holdings N.V. has a diverse customer base, which reduces the bargaining power of individual customers. Additionally, the company's strong market position and long-term contracts further limit the bargaining power of customers.

Bargaining Power Of Suppliers

AerCap Holdings N.V. relies on a limited number of aircraft manufacturers, which gives them some bargaining power. However, the company's large order book and long-term contracts help to mitigate this risk.

Threat Of New Entrants

The aircraft leasing industry has high barriers to entry, including significant capital requirements and regulatory hurdles. This limits the threat of new entrants and allows AerCap Holdings N.V. to maintain its market position.

Intensity Of Rivalry

The aircraft leasing industry is highly competitive, with several large players competing for market share. AerCap Holdings N.V. faces intense competition from companies such as GECAS and Avolon, which could impact its market share and pricing power.

9. SWOT Analysis

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

	Value
Debt Weight	73.35%
Debt Cost	4.70%
Equity Weight	26.65%
Equity Cost	13.14%
WACC	6.95%
Leverage	275.22%

11. Quality Control: AerCap Holdings N.V. passed 3 out of 9 key points

Strong Liquidity

Low Deb

Strong Interest Coverage

Healthy Cash Flow

Operating Inefficiency

Strong Return On Equity

Consistent Revenue Growth

Consistent Operating Cash Flow Growth

Margin Improvement

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Vinci

A-Score: 6.7/10

Value: 6.3

Growth: 6.1

Quality: 4.7

Yield: 6.9

Momentum: 7.0

Volatility: 9.0

1-Year Total Return ->

Volvo

A-Score: 5.6/10

Value: 3.7

Growth: 6.4

Quality: 4.3

Yield: 8.8

Momentum: 4.0

Volatility: 6.3

1-Year Total Return ->

AerCap

A-Score: 5.5/10

Value: 6.3

Growth: 5.2

Quality: 5.3

Yield: 0.6

Momentum: 7.5

Volatility: 8.0

1-Year Total Return ->

BAE Systems

A-Score: 4.9/10

Value: 2.4

Growth: 6.8

Quality: 4.9

Yield: 5.0

Momentum: 4.5

Volatility: 6.0

1-Year Total Return ->

Saint-Gobain

A-Score: 4.8/10

Value: 4.7

Growth: 5.8

Quality: 4.5

Yield: 4.4

Momentum: 4.0

Volatility: 5.3

1-Year Total Return ->

Ashtead

A-Score: 4.8/10

Value: 3.8

Growth: 7.9

Quality: 7.2

Yield: 1.9

Momentum: 1.5

Volatility: 6.3

1-Year Total Return ->

Peers Metrics

12.e Scoring ^Insights

12.f DCF ^BETA

Parameters

Short Term Growth

40.40%

Short term Time

10.0

Long-Term Growth

2.00%

WACC

6.95%

AerCap Holdings N.V. - NL0000687663

1. Company Snapshot

1.a. Company Description

1.b. Last Insights on AER

1.c. Company Highlights

Lower Yield

Strong Momentum

Medium Volatility

Earnings Beats

Stable Momentum

Average Growth

Revenues Beats

Less Volatile

Average Quality

Revenues Miss

Fairly Valued

2. AerCap Holdings N.V. Posts Record Financial Performance

Financial Highlights

Valuation and Capital Allocation

Operational Performance

Outlook and Risks

3. NewsRoom

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (10.50%)

6. Segments

Leasing, Financing, Sales and Management of Commercial Flight Equipment

Expected Growth: 10.5%

7. Detailed Products

Aircraft Leasing

Aircraft Trading

Aircraft Management

Engine Leasing

Aircraft Financing

8. AerCap Holdings N.V.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Bargaining Power Of Customers

Bargaining Power Of Suppliers

Threat Of New Entrants

Intensity Of Rivalry

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

11. Quality Control: AerCap Holdings N.V. passed 3 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

148.13$

Current Price

148.13$

Potential

-0.00%

Expected Cash-Flows

12.e Scoring ^Insights

12.f DCF ^BETA