Is AER a good stock to buy? We came across a bullish thesis on AerCap Holdings N.V. on Bristlemoon Capital’s Substack. In this article, we will summarize the bulls’ thesis on AER. AerCap Holdings N.V.’s share was trading at $151.05 as of May 6th. AER’s trailing and forward P/E were 6.05 and 10.12 respectively according to Yahoo Finance.
AerCap Holdings N.V. engages in the lease, financing, sale, and management of commercial flight equipment in the United States, China, and internationally. AER is a misunderstood compounder within the airline value chain, challenging Warren Buffett’s view that aviation is structurally capital-destroying. While airlines show weak economics, AerCap, the world’s largest aircraft lessor, sits in a distinct profit pool with attractive returns and dispersion across the ecosystem, benefiting from global aviation cycle recovery and asset scarcity.
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It benefits from tight aircraft supply, long-term leases, and strong carrier demand, supporting near-full utilization and pricing power, driving resilient cash flow generation over cycles. Since spin-off, AerCap has compounded value via aggressive buybacks, shrinking shares and increasing per-share ownership, boosting book value per share and enhancing long-term compounding per share.
Management, highly aligned through equity ownership, executes aircraft sales above book and share buybacks below market, driving per-share value creation and creating consistent intrinsic value accretion over time. Despite appreciation, AerCap looks conservatively valued as guidance assumes flat lease rents and excludes aircraft sale gains that historically contribute materially, supporting potential earnings upside normalization.
High utilization near 99% and strong renewals indicate pricing strength, while lease repricing from COVID-era contracts adds upside. Normalized earnings are meaningfully above guidance, implying mid-to-high teens EPS potential.
AerCap also retains optional upside from aeroderivative demand tied to data center energy constraints via its large engine portfolio, amplifying long-term re-rating optionality in structural demand themes. However, elevated valuation limits multiple expansion, though long-term compounding and AI-related optionality still support upside in a balanced setup.
Previously, we covered a bullish thesis on AerCap Holdings N.V. (AER) by jefke in January 2025, which highlighted aircraft supply shortages, asset undervaluation relative to book value, and aggressive buybacks driving upside. AER’s stock price has appreciated by approximately 59.50% since our coverage. Bristlemoon Capital shares a similar view but emphasizes stronger earnings normalization, lease repricing upside, and additional re-rating optionality from aeroderivative demand tied to data center energy constraints.
AerCap Holdings N.V. is not on our list of the 40 Most Popular Stocks Among Hedge Funds. As per our database, 54 hedge fund portfolios held AER at the end of the fourth quarter which was 55 in the previous quarter. While we acknowledge the risk and potential of AER as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than AER and that has 10,000% upside potential, check out our report about this cheapest AI stock.
Disclosure: None.
