TD Cowen cuts Air Lease Corp to hold from buy; cuts target price to $65 from $67

TD Cowen cuts Air Lease Corp to hold from buy; cuts target price to $65 from $67

TD Cowen, a prominent financial services firm, has downgraded Air Lease Corp (AL) to "Hold" from "Buy" and reduced its price target to $65 from $67. The downgrade follows the recent acquisition deal announced for Air Lease Corp. The stock is currently trading at $64.09, leaving limited upside to the deal price [2].

The acquisition deal, which is set to close in the first half of 2026, involves a new Dublin-based holding company, Sumisho Air Lease Corporation, owned by Sumitomo Corp (37.5%), SMBC Aviation Capital (25%), Apollo (18.75%), and Brookfield (18.75%). Deutsche Bank, in its recent report, estimated the total potential returns of the deal to be 1.8% to 2.1%, which was deemed insufficient to justify a "Buy" rating [2].

The downgrade by TD Cowen reflects the limited upside potential for investors following the acquisition. The new entity will manage Air Lease's fleet and take over its aircraft order book, positioning it closer to industry leader AerCap. However, the deal's impact on Air Lease's valuation remains a concern for analysts.

The downgrade by TD Cowen is significant as it adds to the recent trend of Wall Street analysts being cautious about Air Lease's prospects. In the past year, Air Lease has received a mix of ratings, with 1 "sell," 0 "hold," and 4 "buy" ratings from analysts [1].

References:
[1] https://www.marketbeat.com/stocks/NYSE/AL/forecast/
[2] https://www.investing.com/news/stock-market-news/deutsche-bank-downgrades-air-lease-after-65ashare-takeover-deal-4221975