Prescience Point Capital Management Reiterates "Strong Buy" Recommendation on AerSale Corporation with Price Target of $45.90

Rhea-AI Summary

Prescience Point Capital Management reiterates its Strong Buy recommendation on AerSale Corporation (Nasdaq: ASLE) and outlines several near-term catalysts that could nearly triple its current share price. The catalysts include the imminent FAA approval of AerAware, the company's Enhanced Flight Vision System, and the reacceleration of growth in the core business. Prescience Point expects the FAA to approve AerAware by September 20 and anticipates several large initial orders for the product. They also project that the core business will generate Adjusted EBITDA of $93.3 million in FY 2024. With these positive developments, Prescience Point values AerSale shares at $45.90, representing a 194.4% premium to the current share price of $15.59.

Positive

• AerSale's near-term catalysts could nearly triple its current share price
• Imminent FAA approval of AerAware expected by September 20
• Several large initial orders anticipated for AerAware
• Projected Adjusted EBITDA of $93.3 million for the core business in FY 2024
• AerSale shares valued at $45.90, a 194.4% premium to the current share price

Negative

• None.

FAA Approval and Commercialization of AerAware, and Reacceleration of Growth in Core Business are Powerful Catalysts for Immediate Share Price Appreciation

Recent, Large Insider Purchases Support Prescience Point's Bullish Outlook for the Company 

BATON ROUGE, La., Sept. 7, 2023 /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 outlined several near-term catalysts that could nearly triple its current share price. Prescience Point, which has held a significant long-term position in shares of AerSale, has a near-term price target of $45.90 on the company.

A copy of Prescience Point's new research report on AerSale, a leading provider of aviation products and services, can be found HERE.

Prescience Point's research report cited two significant catalysts related to AerSale's recent successful completion of all FAA certification flight testing for AerAware™, its pioneering Enhanced Flight Vision System (EFVS) that enables pilots to "see" through low visibility conditions:

• FAA approval of AerAware is imminent and is a near certainty. On August 21, ASLE announced that, after hundreds of hours of FAA flight tests spanning 4+ years, it had successfully completed the last set of tests for AerAware. The Company has stated that FAA approval typically comes within 30 days after completion of final flight testing. Based on this, Prescience Point expects the FAA to approve AerAware and issue a Supplemental Type Certification (STC) by no later than September 20. Once AerAware is approved, AerSale will be first-to-market with the only certified EFVS of its kind, giving the Company a monopoly over this massive market opportunity for several years.
  
  
• Shortly after certification, AerSale should receive several large initial orders for AerAware. Prescience Point expects the Company to receive several initial orders for AerAware upon FAA certification. Management has consistently stated that several large domestic airlines are interested in and have already flown multiple test flights with the product, including a major domestic airline that management expects to place a launch order of at least 250 units. Based on management's description of the unidentified purchaser, it is likely that this launch customer is United Airlines. Furthermore, Prescience Point's research indicates that both Southwest Airlines and Alaska Airlines have also flown multiple test flights with the product and will likely place large orders soon after the product is certified. 

In addition to its positive outlook for AerAware, Prescience Point also expects growth in the core business to sharply reaccelerate.  During its Q2 2023 earnings call, AerSale reported a significant increase in feedstock purchases during the first half of the year and projected that total feedstock purchases in FY 2023 would amount to ~$250 million, almost 5x the amount purchased in FY 2022.  At the same time, the commercial aftermarket appears to be at the beginning stages of what is expected to be a multi-year bull cycle driven by a protracted shortfall in new aircraft deliveries.  Given the record amount of feedstock it has recently accumulated on its balance sheet, AerSale's core business is well-positioned to capitalize on this favorable industry environment.

Prescience Point estimates that the core business will generate Adjusted EBITDA of $93.3 million in FY 2024. Additionally, Prescience Point projects that AerAware will contribute an additional $62 million of Adjusted EBITDA in FY 2024 from the delivery of 250 units of the product.  Based on this projection that AerSale will generate a combined total of $155.3 million of Adjusted EBITDA in FY 2024 and assuming a multiple of 15x, comparable to industry peers, Prescience Point values AerSale shares at $45.90. This represents a 194.4% premium to the current share price of $15.59.

"AerSale now has a clear runway to commercialization of its game-changing AerAware system," said Eiad Asbahi, Founder and Portfolio Manager of Prescience Point. "We believe these imminent near-term catalysts will boost the Company's share price to beyond $20 over the next 30-45 days. Over the next 12-18 months, we project AerSale shares will nearly triple to $45.90, driven by a significant ramp-up in AerAware sales, along with a sharp reacceleration of growth in the core business.  This bullish outlook is supported by the actions of AerSale's executives, who recently purchased a large amount of shares in the days following the most recent earnings report."

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. Past performance is not indicative of future results.

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.

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SOURCE Prescience Point Capital Management

FAQ

What is the near-term catalyst for AerSale's share price increase?

The near-term catalysts for AerSale's share price increase include the imminent FAA approval of AerAware and the reacceleration of growth in the core business.

When is the expected FAA approval for AerAware?

The FAA approval for AerAware is expected by no later than September 20.

What is the projected Adjusted EBITDA for the core business in FY 2024?

The projected Adjusted EBITDA for the core business in FY 2024 is $93.3 million.

What is the valuation of AerSale shares?

AerSale shares are valued at $45.90, representing a 194.4% premium to the current share price.