Barclays has reaffirmed an Overweight rating on AerCap Holdings after the aircraft lessor reported fourth-quarter results that beat multiple expectations. The company is trading at a price-to-earnings ratio of 6.58, well below typical market averages.
AerCap recorded adjusted earnings per share of $3.95, above Barclays’ internal estimate of $3.87 and ahead of the consensus figure cited in the results of $3.41. Separately reported figures in the earnings release noted an EPS outcome of $3.95 versus a forecast of $3.36, which was characterized as a 17.56% surprise against that latter forecast.
Revenue performance also exceeded forecasts. Total top-line results came in roughly 8% higher than Barclays’ revenue projections, driven primarily by maintenance revenue that ran about 56% above estimates and sales that exceeded expectations by 21%. For the trailing twelve months, AerCap generated $8.52 billion in revenue and reported a gross profit margin of 61.31%.
Management announced a new $1 billion share repurchase program and increased the quarterly dividend payment to $0.40 per share. The company attributed its sales revenue outperformance in part to stronger-than-expected margins - 24% realized versus Barclays’ margin projection of 15%. Data flagged from InvestingPro indicated an active program of share buybacks by AerCap’s management team and noted a 60% increase in the dividend over the prior twelve months.
Not all line items were favorable relative to estimates. Leasing expenses were noticeably higher than Barclays had anticipated, totaling $380 million compared with the bank’s estimate of $144 million. AerCap identified costs associated with a repossessed Spirit aircraft that is undergoing repairs as the driver of the elevated leasing expense.
The company continues to operate with a large level of leverage. Total debt stood at $43.57 billion as of the most recent quarter, a figure disclosed in the results.
Looking ahead to 2026, AerCap provided guidance implying about 9.5% year-over-year earnings per share growth at the midpoint of its range, excluding sales. That midpoint projection compares with Street expectations near 8% growth; Barclays noted that the high end of the company’s indicated range would imply roughly 14% growth.
Additional commentary from InvestingPro suggested that AerCap may be trading below its Fair Value assessment, with further analytical ProTips and a deeper Pro Research Report available to subscribers. The report package referenced includes over 1,400 deep-dive reports accessible to that service’s subscribers.
In related coverage of the fourth quarter, the company’s reported revenue for the period was $2.24 billion, topping an expected $2.08 billion and equating to a 7.69% beat versus that forecast. Despite the pair of beats on earnings and revenue, AerCap’s shares fell in pre-market trading, a movement attributed to broader market concerns and other external factors. The company did not report any mergers or acquisitions in the period, and there have been no recent analyst upgrades or downgrades disclosed.
These results leave investors with a mix of positive operational beats and near-term cost items to monitor. The firm’s combination of buyback activity, a larger dividend, strong margins on sales and a low P/E ratio are supportive data points, while elevated leasing expenses tied to the repossessed aircraft and a sizable debt load are important caveats highlighted by the quarter.
Summary
AerCap reported stronger-than-expected fourth-quarter results with adjusted EPS of $3.95 and revenue outperformance led by maintenance and sales. Barclays maintained an Overweight rating. Management announced a $1 billion repurchase plan and raised the quarterly dividend to $0.40. Offsetting positives are higher-than-expected leasing expenses related to a repossessed Spirit aircraft and significant total debt of $43.57 billion.
Key points
- AerCap beat earnings and revenue estimates in Q4, with adjusted EPS of $3.95 and revenue of $2.24 billion for the quarter.
- Management initiated a $1 billion share repurchase program and increased the quarterly dividend to $0.40; dividend growth was 60% over the last twelve months per InvestingPro data.
- Costs and balance sheet metrics to monitor include $380 million in leasing expenses in the quarter and total debt of $43.57 billion.
Risks and uncertainties
- Higher leasing expenses - Elevated costs tied to a repossessed Spirit aircraft increased leasing expenses to $380 million versus Barclays’ $144 million estimate, creating near-term margin pressure for the leasing and aviation maintenance sectors.
- Leverage - The company reported total debt of $43.57 billion, a sizable obligation that affects AerCap’s financial flexibility and has implications for capital markets and corporate credit conditions.
- Market sensitivity - Despite operational beats, the stock fell in pre-market trading due to broader market concerns and other external factors, indicating sensitivity to macro and market sentiment in financial markets.