AER

AerCap is firing on every fundamental cylinder while the market prices it like a value trap. FY2025 revenue rose 6.5% to $8.52B, but net income jumped 78.7% to $3.75B and diluted EPS nearly doubled (+97.4%) to $21.30 — the latter turbocharged by a 10.7% reduction in shares outstanding as management bought back stock aggressively. The result is a 44.0% net margin, a 20.5% return on equity, and a stock changing hands at just 6.8x trailing earnings and 2.8x sales. For the dominant global aircraft lessor benefiting from a tight aircraft supply backdrop and recovering air travel, that multiple looks too cheap if earnings hold anywhere near this level.

The balance sheet, while leveraged, is moving in the right direction. Total liabilities fell 1.7% and long-term debt declined 3.8% to $43.6B even as equity grew 6.6% to $18.3B and retained earnings climbed 27.9% to $16.3B. Operating cash flow remains robust at $5.39B (essentially flat YoY), comfortably funding the $192M dividend (+37.5%) and the buyback. A liabilities/equity ratio of 2.91x is high in absolute terms but unremarkable — even conservative — for a capital-intensive leasing model, and the company is deleveraging rather than stretching.