Shares of FTAI Aviation (FTAI, Financial) surged by 6.1% following the announcement of Donald Trump winning the 2024 US presidential election. This increase in stock price reflects investor optimism about Trump's pro-business stance, which is perceived as potentially beneficial for industrial stocks like FTAI.
FTAI Aviation Ltd, trading under the ticker FTAI, is an aerospace company specializing in the ownership and maintenance of commercial jet engines, with a particular focus on CFM56 engines. The company reported a recent price of $147.63. With a market capitalization of approximately $15.14 billion, FTAI bears a significant presence in the industry. However, it's noteworthy that FTAI's stock is currently considered "Significantly Overvalued" compared to its GF Value of approximately $66.71.
Despite the current favorable market dynamics and Trump's potential influence on industrial sectors, investors should approach FTAI with caution. The company has recorded a loss in operating income at least once over the past three years, and its Altman Z-Score of 2.96 indicates financial stress. Additionally, the company's debt levels are a concern, with a debt-to-equity ratio of 27.15, which is significantly higher than the industry median.
On the positive side, FTAI has shown consistent revenue and earnings growth, as indicated by its predictable revenue per share and expanding operating margin. The Beneish M-Score also suggests that FTAI is unlikely a manipulator. Furthermore, investors should remain aware of the company's declining gross margin, potentially due to competitive pressures and operational challenges in the industry.
FTAI's current price-to-book ratio stands at an elevated 128.37, and the price is close to its 10-year high, suggesting that the stock may be overvalued based on traditional valuation metrics. This is further supported by its GF Value assessment. Overall, while the recent political news may boost short-term optimism, potential investors should weigh these factors carefully before making an investment decision in FTAI Aviation.
