Truist Securities downgraded AerSale (NASDAQ:ASLE) from Buy to Hold, lowering its price target to $6 from $8 amid ongoing challenges in the used serviceable material (USM) market and limited visibility into future growth drivers. As a result, the company’s shares fell over 4% on Friday.
The firm slashed its earnings estimates for 2025 and 2026, now projecting EPS of $0.20 and $0.47, respectively—down from prior forecasts of $0.42 and $0.77. The revision reflects continued supply constraints in sourcing retired aircraft and serviceable components, a key input for AerSale’s aftermarket parts business. As fewer aircraft retire due to new production delays, pressure is mounting on USM availability, contributing to erratic revenue from whole asset sales.
Truist also expressed skepticism around the timeline and revenue potential of AerAware, AerSale’s advanced vision system product. While the firm does model for revenue contributions from AerAware in 2026, it admits confidence in those projections is low due to uncertain adoption rates.
While the $6 price target is based on a seemingly conservative 13x multiple of 2026 EPS—well below the sector average of roughly 30x—Truist argues that the valuation discount is justified by unpredictable feedstock availability and weak earnings visibility. By contrast, commercial aerospace peers are expected to post strong double-digit revenue growth, highlighting AerSale’s relative underperformance.
