BATON ROUGE, La., Nov. 17, 2021 /PRNewswire/ -- Prescience Point
Capital Management, a research-focused, catalyst-driven investment
firm that seeks to earn superior risk-adjusted returns uncorrelated
to the broader market, today reiterated its Strong Buy
recommendation on AerSale Corporation (Nasdaq: ASLE) ("AerSale" or
"the Company") and expressed confidence in its price target of
$47.00.
A copy of Prescience Point's new research report on AerSale, a
leading provider of aftermarket aircraft services and equipment,
can be found HERE.
Following the release of AerSale's Q3 2021 earnings report on
November 9th, Prescience
Point continues to believe that AerSale is one of the most
attractive and obvious investments that it has ever seen.
Despite the delay of key catalysts related to AerAware to early
next year, the Company is still on track to generate a run-rate of
around $2.00 of adjusted EPS, on a
fully diluted basis, by the end of 2022, which is more than double
what it is projected to earn in 2021.
"We are even more confident in our investment in AerSale today
than we were prior to the Q3 earnings report," said Eiad Asbahi, Founder and Portfolio Manager of
Prescience Point. "For the reasons noted in our latest report, we
reiterate our Strong Buy recommendation and price target of
$47, and we continue to believe that
the Company's shares will eventually exceed $100 over the long-term," he added.
Mr. Asbahi noted that information provided by AerSale management
in the Q3 earnings report confirmed or strengthened most of the key
points of Prescience Point's long-term thesis, specifically:
- FAA approval of AerAware was confirmed to be a near certainty.
During the Q3 conference call, AerSale management said that,
despite delays in the certification process for its AerAware
wearable head-up display (HUD) technology, completion of the
process is expected before the end of February 2022 and final FAA approval should be
granted shortly thereafter. AerSale management stated, "We're
highly confident it's not a matter of if, rather it's only a matter
of when we will receive an AerAware STC (Supplemental Type
Certificate)." If AerAware is approved in Q2 of next year, as
management claims it is almost certain to be, the Company will be
first-to-market with the only viable wearable HUD solution for the
commercial airline market. The game-changing AerAware technology
will significantly reduce delays and diversions by enabling
commercial airline pilots to see through inclement weather such as
snow, rain, sleet and fog.
- A large initial order for AerAware was confirmed to be highly
likely. During prior earnings calls and investor presentations,
AerSale management has repeatedly indicated that it expects to
receive a large order for AerAware from a major domestic airline
upon receipt of FAA approval. During its Q3 conference call,
AerSale management confirmed this once again, and predicted that an
initial order for AerAware would be in the range of 250 units.
Assuming that AerSale is able to fulfill the entire 250 unit
order over a 12-month timeframe, Prescience Point projects that
this initial order would contribute an additional $0.80 of EPS, almost doubling the Company's
annual earnings.
- Multiple, additional STCs are currently in process for
AerAware. During its Q3 earnings call, AerSale management disclosed
that it is currently working on multiple, additional STCs for
AerAware beyond the Boeing 737 and is in the process of engineering
the integration of the product into the Airbus A318, A319, A320 and
A321. These additional STCs will greatly expand the addressable
market for this product.
- AerSale projects a significant rebound in financial performance
In Q4 2021. While the Company's Q3 results were below expectations,
this was largely the result of "lumpy" timing for sales of its
fleet of converted Boeing 757 cargo planes, and not due to any
deterioration in the fundamentals of the business. This conclusion
is supported by management's projection of a strong rebound in
financial performance in Q4 2021. Based on the midpoint of
AerSale's revised full-year adjusted EBITDA guidance of
$85 million and the $60.7 million of adjusted EBITDA generated
through the first three quarters of 2021, the Company projects that
it will generate almost $25 million
of adjusted EBITDA in Q4 2021.
- The core business is poised to accelerate further in 2022.
Prescience Point expects AerSale's core business to grow
significantly in 2022 due to several major tailwinds. First,
the Company will greatly benefit from the monetization of its
remaining fleet of 757s. Prescience Point projects that the Company
will still have 13, or more than half, of its fleet of 757s
remaining at the end of 2021. Given that ASLE already has all but
three of its remaining 757s under contract or LOI, Prescience Point
expects all 13 of these remaining planes will be monetized in FY
2022. Second, during its Q3 earnings call, management
disclosed that it is starting to see an increase in the number of
used aircraft available for sale at attractive prices, which could
lead to opportunities for further growth in the Company's core
business as these assets are acquired and then monetized via
leasing, whole asset sales and the sale of parts. Finally,
AerSale should benefit from the continued recovery in domestic and
international airline traffic, which should drive a significant
increase in demand for the Company's products and services.
DISCLAIMER
This material does not constitute an offer
to sell or a solicitation of an offer to buy any of the securities
described herein in any state to any person. In addition, the
discussions and opinions in this press release are for general
information only and are not intended to provide investment
advice. All statements contained in this press release that
are not clearly historical in nature or that necessarily depend on
future events are "forward-looking statements," which are not
guarantees of future performance or results, and the words
"anticipate," "believe," "expect," "potential," "could,"
"opportunity," "estimate," and similar expressions are generally
intended to identify forward-looking statements. The
projected results and statements contained in this press release
that are not historical facts are based on current expectations,
speak only as of the date of this press release and involve risks
that may cause the actual results to be materially different.
Certain information included in this material is based on data
obtained from sources considered to be reliable. No
representation is made with respect to the accuracy or completeness
of such data, and any analyses provided to assist the recipient of
this presentation in evaluating the matters described herein may be
based on subjective assessments and assumptions and may use one
among alternative methodologies that produce different
results. Accordingly, any analyses should also not be viewed
as factual and also should not be relied upon as an accurate
prediction of future results. All figures are unaudited
estimates and subject to revision without notice. Prescience
Point disclaims any obligation to update the information herein and
reserves the right to change any of its opinions expressed herein
at any time as it deems appropriate.
About Prescience Point Capital Management
Prescience
Point Capital Management is a research-focused, catalyst-driven
investment firm that seeks to earn superior risk-adjusted returns
uncorrelated to the broader market. Unlike traditional investment
strategies, we are unconstrained and can opportunistically invest
globally, across asset classes, industry verticals and capital
structures. Whether investing in misunderstood distressed assets,
creating value through shareholder activism, or uncovering fraud,
we seek to capitalize on opportunities that others miss or fall
outside the rigid mandates of most investment firms.
Our uniqueness resides in our unconventional thinking, deep
research, intellectual curiosity and willingness to go against the
prevailing wisdom.
The firm was founded by investor Eiad
Asbahi in 2009 and is headquartered in Baton Rouge, LA.
For more information please visit www.presciencepoint.com or
follow @PresciencePoint.
Prescience Investment Group, LLC is a member of the Financial
Industry Regulatory Authority, CRD number 152721.
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