Intrinsic value of AerCap Holdings - AER

Previous Close

$52.12

  Intrinsic Value

$34.56

stock screener

  Rating & Target

sell

-34%

Previous close

$52.12

 
Intrinsic value

$34.56

 
Up/down potential

-34%

 
Rating

sell

Our model is not good at valuating stocks of financial companies, such as AER.

We calculate the intrinsic value of AER stock by summing up the current values of future distributable cash flows generated by the company and dividing the sum by the number of outstanding shares. As such, the intrinsic value calculation depends entirely on projections. The more accurate your projections of the company's performance are - the more reliable is the intrinsic value calculation result. Please make sure to check the stock valuation input data below and adjust it if necessary. The quality of the output (intrinsic valuation result) is only as good as the quality of the input. See also DISCLAIMERS.

STOCK VALUATION INPUT DATA

Revenue (in 2016), $M
Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Variable cost ratio, %
Fixed operating expenses, $M
Interest rate on debt, %
Effective corporate tax rate, %
Production assets / Revenue, %
Life of production assets, yrs
Working capital / Revenue, %
Revenue / Adjusted assets
Adjusted equity ratio
Cash flow adjustment, % of Revenue
Book value of equity, $M
Shares outstanding, mln
Market capitalization, $bln 8.5

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
2016(a)
   2017
   2018
   2019
   2020
   2021
   2022
   2023
   2024
   2025
   2026
   2027
   2028
   2029
   2030
   2031
   2032
   2033
   2034
   2035
   2036
   2037
   2038
   2039
   2040
   2041
   2042
   2043
   2044
   2045
   2046

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  -1.76
  2.00
  2.30
  2.57
  2.81
  3.03
  3.23
  3.41
  3.57
  3.71
  3.84
  3.95
  4.06
  4.15
  4.24
  4.31
  4.38
  4.44
  4.50
  4.55
  4.59
  4.64
  4.67
  4.70
  4.73
  4.76
  4.78
  4.81
  4.83
  4.84
  4.86
Revenue, $m
  5,014
  5,114
  5,232
  5,366
  5,517
  5,685
  5,868
  6,068
  6,284
  6,517
  6,767
  7,035
  7,321
  7,625
  7,948
  8,291
  8,654
  9,038
  9,445
  9,875
  10,329
  10,807
  11,312
  11,844
  12,405
  12,996
  13,618
  14,272
  14,961
  15,685
  16,447
Variable operating expenses, $m
 
  2,828
  2,893
  2,968
  3,051
  3,144
  3,245
  3,356
  3,475
  3,604
  3,742
  3,890
  4,048
  4,216
  4,395
  4,585
  4,786
  4,998
  5,223
  5,461
  5,712
  5,976
  6,256
  6,550
  6,860
  7,187
  7,530
  7,892
  8,273
  8,674
  9,095
Fixed operating expenses, $m
 
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total operating expenses, $m
  2,860
  2,828
  2,893
  2,968
  3,051
  3,144
  3,245
  3,356
  3,475
  3,604
  3,742
  3,890
  4,048
  4,216
  4,395
  4,585
  4,786
  4,998
  5,223
  5,461
  5,712
  5,976
  6,256
  6,550
  6,860
  7,187
  7,530
  7,892
  8,273
  8,674
  9,095
Operating income, $m
  2,154
  2,286
  2,339
  2,399
  2,466
  2,541
  2,623
  2,712
  2,809
  2,913
  3,025
  3,145
  3,272
  3,408
  3,553
  3,706
  3,868
  4,040
  4,222
  4,414
  4,617
  4,831
  5,057
  5,294
  5,545
  5,809
  6,087
  6,380
  6,687
  7,011
  7,352
EBITDA, $m
  3,965
  4,133
  4,228
  4,336
  4,458
  4,594
  4,742
  4,903
  5,078
  5,267
  5,469
  5,685
  5,916
  6,161
  6,422
  6,699
  6,993
  7,304
  7,632
  7,980
  8,346
  8,733
  9,141
  9,571
  10,024
  10,502
  11,004
  11,533
  12,090
  12,675
  13,291
Interest expense (income), $m
  1,339
  1,303
  1,329
  1,366
  1,407
  1,454
  1,506
  1,563
  1,625
  1,691
  1,764
  1,841
  1,924
  2,012
  2,106
  2,206
  2,312
  2,425
  2,544
  2,669
  2,802
  2,943
  3,091
  3,247
  3,412
  3,585
  3,768
  3,960
  4,163
  4,376
  4,600
Earnings before tax, $m
  1,200
  983
  1,009
  1,033
  1,059
  1,087
  1,117
  1,150
  1,185
  1,222
  1,261
  1,304
  1,349
  1,396
  1,446
  1,500
  1,556
  1,616
  1,678
  1,745
  1,815
  1,888
  1,966
  2,047
  2,133
  2,224
  2,319
  2,419
  2,525
  2,635
  2,752
Tax expense, $m
  173
  266
  272
  279
  286
  293
  302
  310
  320
  330
  341
  352
  364
  377
  391
  405
  420
  436
  453
  471
  490
  510
  531
  553
  576
  600
  626
  653
  682
  712
  743
Net income, $m
  1,047
  718
  737
  754
  773
  793
  816
  839
  865
  892
  921
  952
  984
  1,019
  1,056
  1,095
  1,136
  1,179
  1,225
  1,274
  1,325
  1,378
  1,435
  1,495
  1,557
  1,623
  1,693
  1,766
  1,843
  1,924
  2,009

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  2,035
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total assets, $m
  41,620
  40,270
  41,196
  42,255
  43,443
  44,761
  46,206
  47,779
  49,483
  51,318
  53,287
  55,394
  57,642
  60,036
  62,580
  65,280
  68,140
  71,169
  74,371
  77,755
  81,327
  85,097
  89,073
  93,263
  97,678
  102,328
  107,224
  112,378
  117,801
  123,506
  129,506
Adjusted assets (=assets-cash), $m
  39,585
  40,270
  41,196
  42,255
  43,443
  44,761
  46,206
  47,779
  49,483
  51,318
  53,287
  55,394
  57,642
  60,036
  62,580
  65,280
  68,140
  71,169
  74,371
  77,755
  81,327
  85,097
  89,073
  93,263
  97,678
  102,328
  107,224
  112,378
  117,801
  123,506
  129,506
Revenue / Adjusted assets
  0.127
  0.127
  0.127
  0.127
  0.127
  0.127
  0.127
  0.127
  0.127
  0.127
  0.127
  0.127
  0.127
  0.127
  0.127
  0.127
  0.127
  0.127
  0.127
  0.127
  0.127
  0.127
  0.127
  0.127
  0.127
  0.127
  0.127
  0.127
  0.127
  0.127
  0.127
Average production assets, $m
  34,943
  35,641
  36,461
  37,398
  38,450
  39,616
  40,895
  42,288
  43,795
  45,419
  47,163
  49,027
  51,017
  53,136
  55,387
  57,777
  60,309
  62,989
  65,823
  68,818
  71,980
  75,316
  78,835
  82,544
  86,451
  90,567
  94,900
  99,461
  104,261
  109,310
  114,621
Working capital, $m
  0
  -2,076
  -2,124
  -2,179
  -2,240
  -2,308
  -2,382
  -2,464
  -2,551
  -2,646
  -2,748
  -2,856
  -2,972
  -3,096
  -3,227
  -3,366
  -3,513
  -3,670
  -3,835
  -4,009
  -4,193
  -4,388
  -4,593
  -4,809
  -5,036
  -5,276
  -5,529
  -5,794
  -6,074
  -6,368
  -6,678
Total debt, $m
  27,717
  28,287
  29,061
  29,946
  30,940
  32,041
  33,249
  34,564
  35,989
  37,523
  39,169
  40,931
  42,810
  44,811
  46,938
  49,195
  51,586
  54,118
  56,795
  59,624
  62,611
  65,762
  69,086
  72,589
  76,280
  80,168
  84,261
  88,569
  93,102
  97,872
  102,888
Total liabilities, $m
  33,096
  33,666
  34,440
  35,325
  36,319
  37,420
  38,628
  39,943
  41,368
  42,902
  44,548
  46,310
  48,189
  50,190
  52,317
  54,574
  56,965
  59,497
  62,174
  65,003
  67,990
  71,141
  74,465
  77,968
  81,659
  85,547
  89,640
  93,948
  98,481
  103,251
  108,267
Total equity, $m
  8,524
  6,604
  6,756
  6,930
  7,125
  7,341
  7,578
  7,836
  8,115
  8,416
  8,739
  9,085
  9,453
  9,846
  10,263
  10,706
  11,175
  11,672
  12,197
  12,752
  13,338
  13,956
  14,608
  15,295
  16,019
  16,782
  17,585
  18,430
  19,319
  20,255
  21,239
Total liabilities and equity, $m
  41,620
  40,270
  41,196
  42,255
  43,444
  44,761
  46,206
  47,779
  49,483
  51,318
  53,287
  55,395
  57,642
  60,036
  62,580
  65,280
  68,140
  71,169
  74,371
  77,755
  81,328
  85,097
  89,073
  93,263
  97,678
  102,329
  107,225
  112,378
  117,800
  123,506
  129,506
Debt-to-equity ratio
  3.252
  4.280
  4.300
  4.320
  4.340
  4.360
  4.390
  4.410
  4.430
  4.460
  4.480
  4.510
  4.530
  4.550
  4.570
  4.600
  4.620
  4.640
  4.660
  4.680
  4.690
  4.710
  4.730
  4.750
  4.760
  4.780
  4.790
  4.810
  4.820
  4.830
  4.840
Adjusted equity ratio
  0.164
  0.164
  0.164
  0.164
  0.164
  0.164
  0.164
  0.164
  0.164
  0.164
  0.164
  0.164
  0.164
  0.164
  0.164
  0.164
  0.164
  0.164
  0.164
  0.164
  0.164
  0.164
  0.164
  0.164
  0.164
  0.164
  0.164
  0.164
  0.164
  0.164
  0.164

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  1,047
  718
  737
  754
  773
  793
  816
  839
  865
  892
  921
  952
  984
  1,019
  1,056
  1,095
  1,136
  1,179
  1,225
  1,274
  1,325
  1,378
  1,435
  1,495
  1,557
  1,623
  1,693
  1,766
  1,843
  1,924
  2,009
Depreciation, amort., depletion, $m
  1,811
  1,847
  1,889
  1,938
  1,992
  2,053
  2,119
  2,191
  2,269
  2,353
  2,444
  2,540
  2,643
  2,753
  2,870
  2,994
  3,125
  3,264
  3,411
  3,566
  3,730
  3,902
  4,085
  4,277
  4,479
  4,693
  4,917
  5,153
  5,402
  5,664
  5,939
Funds from operations, $m
  3,646
  2,565
  2,626
  2,692
  2,765
  2,846
  2,934
  3,030
  3,134
  3,245
  3,365
  3,492
  3,628
  3,772
  3,926
  4,088
  4,261
  4,443
  4,636
  4,839
  5,054
  5,281
  5,520
  5,771
  6,037
  6,316
  6,610
  6,920
  7,245
  7,588
  7,948
Change in working capital, $m
  265
  -41
  -48
  -55
  -61
  -68
  -75
  -81
  -88
  -95
  -102
  -109
  -116
  -123
  -131
  -139
  -148
  -156
  -165
  -174
  -184
  -194
  -205
  -216
  -228
  -240
  -252
  -266
  -280
  -294
  -309
Cash from operations, $m
  3,381
  2,605
  2,674
  2,746
  2,826
  2,914
  3,009
  3,111
  3,222
  3,340
  3,466
  3,601
  3,744
  3,896
  4,057
  4,228
  4,408
  4,599
  4,801
  5,014
  5,238
  5,475
  5,725
  5,988
  6,264
  6,556
  6,863
  7,185
  7,525
  7,882
  8,257
Maintenance CAPEX, $m
  0
  -1,811
  -1,847
  -1,889
  -1,938
  -1,992
  -2,053
  -2,119
  -2,191
  -2,269
  -2,353
  -2,444
  -2,540
  -2,643
  -2,753
  -2,870
  -2,994
  -3,125
  -3,264
  -3,411
  -3,566
  -3,730
  -3,902
  -4,085
  -4,277
  -4,479
  -4,693
  -4,917
  -5,153
  -5,402
  -5,664
New CAPEX, $m
  -3,840
  -698
  -820
  -937
  -1,052
  -1,166
  -1,279
  -1,393
  -1,508
  -1,624
  -1,743
  -1,865
  -1,990
  -2,119
  -2,252
  -2,389
  -2,532
  -2,680
  -2,834
  -2,995
  -3,162
  -3,336
  -3,519
  -3,709
  -3,908
  -4,116
  -4,333
  -4,561
  -4,800
  -5,049
  -5,311
Cash from investing activities, $m
  -1,331
  -2,509
  -2,667
  -2,826
  -2,990
  -3,158
  -3,332
  -3,512
  -3,699
  -3,893
  -4,096
  -4,309
  -4,530
  -4,762
  -5,005
  -5,259
  -5,526
  -5,805
  -6,098
  -6,406
  -6,728
  -7,066
  -7,421
  -7,794
  -8,185
  -8,595
  -9,026
  -9,478
  -9,953
  -10,451
  -10,975
Free cash flow, $m
  2,050
  96
  7
  -80
  -163
  -244
  -323
  -400
  -477
  -554
  -630
  -708
  -786
  -866
  -948
  -1,031
  -1,117
  -1,206
  -1,297
  -1,392
  -1,489
  -1,591
  -1,696
  -1,806
  -1,920
  -2,039
  -2,163
  -2,293
  -2,428
  -2,570
  -2,718
Issuance/(repayment) of debt, $m
  -1,572
  570
  774
  885
  994
  1,101
  1,208
  1,316
  1,424
  1,534
  1,646
  1,761
  1,880
  2,001
  2,127
  2,257
  2,392
  2,532
  2,677
  2,829
  2,987
  3,152
  3,324
  3,503
  3,691
  3,888
  4,093
  4,308
  4,534
  4,769
  5,017
Issuance/(repurchase) of shares, $m
  -1,021
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash from financing (excl. dividends), $m  
  -2,417
  570
  774
  885
  994
  1,101
  1,208
  1,316
  1,424
  1,534
  1,646
  1,761
  1,880
  2,001
  2,127
  2,257
  2,392
  2,532
  2,677
  2,829
  2,987
  3,152
  3,324
  3,503
  3,691
  3,888
  4,093
  4,308
  4,534
  4,769
  5,017
Total cash flow (excl. dividends), $m
  -368
  666
  781
  805
  830
  857
  885
  915
  947
  981
  1,016
  1,054
  1,093
  1,135
  1,179
  1,225
  1,274
  1,326
  1,380
  1,437
  1,497
  1,561
  1,627
  1,697
  1,771
  1,848
  1,930
  2,015
  2,105
  2,200
  2,299
Retained Cash Flow (-), $m
  -175
  -115
  -152
  -174
  -195
  -216
  -237
  -258
  -279
  -301
  -323
  -346
  -369
  -393
  -417
  -443
  -469
  -497
  -525
  -555
  -586
  -618
  -652
  -687
  -724
  -763
  -803
  -845
  -889
  -936
  -984
Prev. year cash balance distribution, $m
 
  2,035
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash flow adjustment, $m
 
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash available for distribution, $m
 
  2,586
  630
  632
  635
  641
  648
  657
  668
  680
  693
  708
  724
  742
  762
  783
  805
  829
  855
  882
  911
  942
  975
  1,010
  1,047
  1,086
  1,127
  1,170
  1,216
  1,264
  1,315
Discount rate, %
 
  10.70
  11.24
  11.80
  12.39
  13.01
  13.66
  14.34
  15.06
  15.81
  16.60
  17.43
  18.30
  19.22
  20.18
  21.19
  22.24
  23.36
  24.52
  25.75
  27.04
  28.39
  29.81
  31.30
  32.87
  34.51
  36.23
  38.05
  39.95
  41.95
  44.04
PV of cash for distribution, $m
 
  2,336
  509
  452
  398
  348
  301
  257
  217
  181
  149
  121
  96
  76
  58
  44
  32
  23
  16
  11
  8
  5
  3
  2
  1
  1
  0
  0
  0
  0
  0
Current shareholders' claim on cash, %
  100
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0

AerCap Holdings N.V. is an independent aircraft leasing company. The Company focuses on acquiring in-demand aircraft, funding them, hedging interest rate risk and using its platform to deploy these assets. It operates its business on a global basis, leasing aircraft to customers in various geographical regions. The Company is engaged in leasing, financing, sales and management of commercial aircraft and engines. It owned 1,022 aircraft, managed 95 aircraft and had approximately 420 new aircraft on order, which included 204 Airbus A320neo Family aircraft, 109 Boeing 737MAX aircraft, 50 Embraer E-Jets E2 aircraft, 38 Boeing 787 aircraft and 19 Airbus A350 aircraft, as of December 31, 2016. As of December 31, 2016, its owned and managed aircraft were leased to approximately 200 customers in approximately 80 countries. AeroTurbine, Inc. is the subsidiary of the Company.

FINANCIAL RATIOS  of  AerCap Holdings (AER)

Valuation Ratios
P/E Ratio 8.8
Price to Sales 1.8
Price to Book 1.1
Price to Tangible Book
Price to Cash Flow 2.7
Price to Free Cash Flow -20
Growth Rates
Sales Growth Rate -1.8%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 7.7%
Cap. Spend. - 3 Yr. Gr. Rate 14%
Financial Strength
Quick Ratio NaN
Current Ratio NaN
LT Debt to Equity 325.2%
Total Debt to Equity 325.2%
Interest Coverage 2
Management Effectiveness
Return On Assets 5.1%
Ret/ On Assets - 3 Yr. Avg. 5.7%
Return On Total Capital 2.8%
Ret/ On T. Cap. - 3 Yr. Avg. 3.1%
Return On Equity 12.4%
Return On Equity - 3 Yr. Avg. 14.2%
Asset Turnover 0.1
Profitability Ratios
Gross Margin 52.7%
Gross Margin - 3 Yr. Avg. 55.4%
EBITDA Margin 86.8%
EBITDA Margin - 3 Yr. Avg. 90.4%
Operating Margin 43%
Oper. Margin - 3 Yr. Avg. 44.8%
Pre-Tax Margin 23.9%
Pre-Tax Margin - 3 Yr. Avg. 25.5%
Net Profit Margin 20.9%
Net Profit Margin - 3 Yr. Avg. 22.3%
Effective Tax Rate 14.4%
Eff/ Tax Rate - 3 Yr. Avg. 14.4%
Payout Ratio 0%

AER stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the AER stock intrinsic value calculation we used $5014 million for the last fiscal year's total revenue generated by AerCap Holdings. The default revenue input number comes from 2016 income statement of AerCap Holdings. You may change it if you feel that it should be adjusted for some unusual circumstances that are not expected to be repeated in the future or if you already know (from interim financial statements, for example) that this year's revenue is going to be quite different.

Revenue growth rate. Forecasted future revenue growth rate is the most important input parameter for the intrinsic value calculation. Unlike other input parameters that are reasonably expected to be in line with their historic averages or their historic trends, the revenue growth rate by and large is a wild card: nobody really knows what the company's revenue will be in the future. Of course, the level of unpredictability is different for different industries (utility companies being the most predictable and, thus, less risky).
    We use three input parameters to forecast the revenue growth rate in our AER stock valuation model: a) initial revenue growth rate of 2% whose default value is the revenue growth rate in the most recent quarter compared to the quarterly revenue a year ago; b) terminal revenue growth rate of 5% whose default value is chosen to be close to the average nominal (i.e. not adjusted for inflation) GDP growth rate; and c) revenue decline factor of 0.9, which stipulates that revenue growth rate in each forecasted year will be equal to the difference of the revenue growth rate in the preceding year and the terminal revenue growth rate multiplied by this revenue decline factor (with the passage of time the revenue growth rate will be approaching the terminal revenue growth rate, but not quite reaching it - though the difference could be infinitesimally small).
    At the revenue decline factor of 1, the future revenue growth rate is forecasted to be constant and equal to the initial revenue growth rate. The smaller the revenue decline factor, the faster the revenue growth rate will approach the terminal revenue growth.

Discount rate. The discount rate is used for determining the present value of future cash flows: future cash flows are "discounted" as at normal conditions (that translate into positive expected return on investment) one dollar today is worth more than the same dollar in the future. Unlike all other valuation models, we use variable discount rate, i.e. it increases for each consecutive year. This is done to account for higher risk of cash flows coming in further in the future.
    The initial discount rate of 10.7%, whose default value for AER is calculated based on our internal credit rating of AerCap Holdings, is applied to the cash flow expected to be received a year from now (well, actually, to be precise, in the financial year following the base year - the last year for which we have financial statements). For each consecutive year the discount rate is multiplied by the discount rate multiplier of 1.05, e.i. each year it increases by 5%. Feel free to change this number to correspond to your level of risk assessment of AerCap Holdings.
    By the way, it is easy to set the discount rate to be constant (this would make comparison with other valuation models easier): just set the discount rate multiplier equal to 1 and chose the magnitude of the initial discount rate to your liking.

Variable cost ratio is the ratio of variable costs (i.e. costs that fluctuate with fluctuation of the volume of production) to the revenue expressed as a percentage. In the calculation of intrinsic value of AER stock the variable cost ratio is equal to 55.3%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $0 million in the base year in the intrinsic value calculation for AER stock. These expenses increase with the level of inflation in subsequent years.

Interest rate on debt is the average all-in rate of interest paid by the company on its debt. It is set at 4.7% for AerCap Holdings.

Corporate tax rate of 27% is the nominal tax rate for AerCap Holdings. In reality, companies find ways to pay much less taxes than that or not to pay them at all.

Cash flow adjustment could be used for any adjustment the investor deems necessary. Most commonly we use this field to account for stock options-related effects in excess of what is reported on the company's income statement. The cash flow adjustment is expressed as a percentage of the revenue, and in the current valuation of the AER stock is equal to 0%.

Production assets are the company's assets used for manufacturing products or provision of services. In the valuation model input table they are expressed as a percentage of revenue and for AER are equal to 696.9%.

Life of production assets of 19.3 years is the average useful life of capital assets used in AerCap Holdings operations. It is used to calculate yearly capital expenditures needed to keep these assets in good order - we call it the maintenance CAPEX.

Working capital is the difference between the company's current assets and liabilities. In the model we use the ratio of working capital to revenue, which for AER is equal to -40.6%. A negative number means that the company is apt at using financial resources of its suppliers and customers; a large positive number, on the other hand, means that it either provides in-kind financing to others or is not good at managing its inventories.

Book value of equity - $8524 million for AerCap Holdings - is used in calculation of the "floor" for intrinsic valuation based on the discounted cash flow (DCF) method. Even if the prospects are very bad for a company, its assets could always be sold now for their current fair market value.

Shares outstanding of 163.4 million for AerCap Holdings is needed to calculate the intrinsic value of one share.

Market capitalization is used here only for reference purposes and as a quick check that the share price and the number of shares outstanding numbers are correct - something especially to be cognizant about at stock splits. So, the market capitalization of AerCap Holdings at the current share price and the inputted number of shares is $8.5 billion.

RELATED COMPANIES Price Int.Val. Rating
FLY Fly Leasing AD 13.28 4.91  str.sell
AYR Aircastle 23.34 5.84  str.sell
AL Air Lease 44.73 11.77  str.sell
ACY AeroCentury 14.65 15.66  hold
WLFC Willis Lease F 23.65 8.39  str.sell
GE General Electr 17.64 23.56  hold
GATX GATX 59.33 32.99  sell
FTAI Fortress Trans 18.54 3.09  str.sell
CAI CAI Internatio 29.23 5.74  str.sell

COMPANY NEWS

▶ What Was David Einhorns Largest Holding in 2Q17?   [Nov-06-17 10:58AM  Market Realist]
▶ AerCap beats Street 3Q forecasts   [07:51AM  Associated Press]
▶ AerCap Delivers Second Boeing 787-9 to Thai Airways   [Oct-31-17 08:09AM  Business Wire]
▶ 4 Stocks Flaunting Low Price-to-Cash-Flow Ratio   [Oct-06-17 07:32AM  Zacks]
▶ Air Lease: Healthy Growth and Stock Upside to Continue   [Oct-03-17 11:39AM  GuruFocus.com]
▶ AerCap Names Brian Canniffe Group Treasurer   [Oct-02-17 07:00AM  Business Wire]
▶ Is AerCap Holdings NV (AER) A Buy At Its Current Price?   [Sep-25-17 08:48PM  Simply Wall St.]
▶ Stocks To Watch: Aercap Sees RS Rating Rise To 82   [Aug-30-17 03:00AM  Investor's Business Daily]
▶ 4 Stocks Flaunting Low Price-to-Cash-Flow Ratio   [Aug-17-17 09:02AM  Zacks]
▶ AerCap beats Street 2Q forecasts   [Aug-04-17 02:28AM  Associated Press]
▶ AerCap Delivers Its First A321neo to SriLankan Airlines   [Jul-03-17 07:27AM  Business Wire]
▶ AerCap orders 30 Boeing 787-9 jets   [10:47AM  Reuters]
▶ ETFs with exposure to AerCap Holdings NV : June 15, 2017   [Jun-15-17 12:55PM  Capital Cube]
▶ ETFs with exposure to AerCap Holdings NV : May 31, 2017   [May-31-17 12:18PM  Capital Cube]
▶ AerCap Delivers 767 to Atlas Air Worldwide   [May-18-17 08:00AM  Business Wire]
▶ AerCap Delivers 787 Dreamliner to Hainan Airlines   [May-10-17 07:59AM  Business Wire]
▶ AerCap misses 1Q profit forecasts   [06:48AM  Associated Press]
Financial statements of AER
Valuation of Stocks

The paper VALUATION OF STOCKS: The Quest for Intrinsic Value provides a detailed description of our valuation model and discloses the calculation algorithm.

FREE DOWNLOAD
Follow us on:   twitter   twitter   twitter   twitter

VALUATION THEORY       ASSET ALLOCATION

About X-FIN       Site news       Privacy policy       Terms of use       FAQ

Copyright © X-FIN.com 2005-2017. All rigths reserved.