AerCap Holdings N.V. (AER): A Bull Case Theory

We came across a bullish thesis on AerCap Holdings N.V. on Value investing subreddit by cameronreilly. In this article, we will summarize the bulls’ thesis on AER. AerCap Holdings N.V.'s share was trading at $144.53 as of January 29th. AER’s trailing and forward P/E were 6.90 and 7.44 respectively according to Yahoo Finance.

AerCap Holdings (AER), the world’s largest aircraft lessor, is a quietly dominant force in global aviation and a classic “boring cash generator” trading at an attractive discount. The company operates a vast portfolio of ~1,700 aircraft, ~1,200 engines, and several hundred helicopters, leasing them to airlines that prefer flexibility over ownership.

AerCap’s model is straightforward: it buys planes at scale-driven discounts and leases them on long-term contracts, generating predictable cash flows supported by long-lived, tangible assets. Its origins trace back to Guinness Peat Aviation, later evolving through transformative acquisitions including ILFC in 2014 and GE’s GECAS in 2021, cementing AerCap as the industry’s final consolidator.

The company endured a major geopolitical shock in 2022 when 150 aircraft were trapped in Russia and Ukraine. After writing off billions and pursuing insurers, AerCap has recovered US$2.9 billion to date, with courts compelling payouts. Meanwhile, operations remain robust. Q3 2025 showcased strong performance with US$1.5 billion in asset sales, a record US$332 million gain on sales, soaring demand for mid-life aircraft due to OEM production delays, and the strongest re-leasing yields seen in ten years. Engine shortages have further boosted part-out economics.

Valuation remains compelling: AerCap trades at 4.15x operating cash flow, a forward P/E of ~9, and only modestly above book value, supported by a strong F-score of 8 and solid quality metrics. Risks include airline exposure, geopolitical shocks, and capital-market dependence. Yet rising global travel demand, constrained aircraft supply into the 2030s, and AerCap’s scale-driven buying power reinforce the bull case. Ultimately, AerCap is the landlord of global aviation—priced like a cyclical, but operating like a durable cash-flow compounder with meaningful rerating potential.

Previously we covered a bullish thesis on AerCap Holdings N.V. (AER) by jefke in January 2025, which highlighted the global aircraft shortage, undervalued assets, and support from share buybacks. The stock has appreciated approximately 52.61% since our coverage as the thesis played out. The thesis still stands due to persistent supply constraints. cameronreilly shares a similar view but emphasizes cash-flow strength and post-Russia recovery.

AerCap Holdings N.V. is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 63 hedge fund portfolios held AER at the end of the second quarter which was 64 in the previous quarter. While we acknowledge the potential of AER as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

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Disclosure: None.