FTAI Aviation is a global company that owns and leases commercial aircraft and engines. It also provides maintenance, repair, and overhaul (MRO) services for aviation components. Following a recent performance update, Jefferies analyst Sheila Kahyaoglu lowered the price target on FTAI to $325 from a previous target of $400.
The analyst's revised outlook comes after FTAI reported challenging earnings. The company's second-quarter earnings per share (EPS) was $1.13, which missed the Zacks Consensus Estimate of $1.32. This figure also represents a significant decrease from the $1.57 EPS reported in the same quarter of the previous year.
This earnings miss continues a trend, as it is the fourth straight quarter the company has not met consensus EPS estimates. FTAI also revised its 2026 guidance for EBITDA, a measure of profitability, downwards by $100 million. This change is primarily due to weaker performance in its leasing operations.
The company's strategy for its MRO business is also impacting profitability. FTAI is focusing on gaining market share by increasing its output of service modules. This approach, however, is leading to a decrease in the EBITDA margin, or profit, generated from each individual module that is serviced.
Looking ahead, the 2027 EBITDA guidance is set at $2.30 billion, which is below what was initially projected. As highlighted by Seeking Alpha, this is attributed to the lower MRO margins and a more rapid reduction of its leasing business, providing context for the more conservative price target.
