We recently compiled a list of the 15 Stocks That Will Go to The Moon According to Analysts. In this article, we are going to take a look at where FTAI Aviation Ltd. (NASDAQ:FTAI) stands against the other stocks.
The Stock Market Under Trump Admin
While stocks initially fell based on worries regarding Trump tariffs on America’s major trading partners, major indexes recovered from their initial losses as the President delayed tariffs on Mexico. He agreed to a 30-day pause on tariffs on Mexico and Canada in return for the two countries bolstering border enforcement to halt fentanyl smuggling and money laundering.
Reuters reported that Trump raising tariffs on steel and aluminum imports to a flat 25% pushed up share prices of US steelmakers. The chaos around tariffs doesn’t end here. According to CNN, the President is looking to pursue more tariffs. Trump has been keen on reciprocal tariffs and wants agencies to investigate plans for new reciprocal tariffs that would increase America’s revenue. He reiterated this keenness saying:
“They charge us a tax or tariff and we charge them the exact same”
These tariffs are expected to hit developing countries, especially India, Brazil, Vietnam, and other Southeast Asian and African countries, considering the large gap in tariff rates charged on US goods brought into these nations relative to what the United States charges them.
On February 14, the New York Times reported that global stock markets are holding up after Trump revealed his plan for reciprocal tariffs against all trading partners. While some countries such as Vietnam, India, and Taiwan have said that they would import specific US goods more, French winemakers are ramping up shipments to the country before levies. The threat of tariffs continues to result in uncertainty, regarding how they could be inflationary and potentially spook investors.
Sucharita Kodali, Retail Analyst at Forrester Research, appeared on CNBC to talk about the potential impact of tariffs on companies. In her opinion, all US companies would face some kind of challenges, with higher prices for both consumers as well as these firms. Based on her analysis, this is going to result in 20 basis points to a 150 basis points negative impact on the US GDP. Meanwhile, RBC’s Tom Narayan previously told CNBC that auto stocks will be the hardest hit by Trump’s Canada and Mexico tariffs, which are being deemed really inflationary and disruptive for the US auto consumer.
Our Methodology
We used a stock screener to find stocks which had the highest average upside potential (at least 25%), as of February 24. The 15 stocks that will go to the moon according to analysts have been arranged in ascending order of their average upside potential. Please note that we excluded penny stocks from our screening criteria. We have also mentioned the hedge fund sentiment for these stocks, as of Q4 2024.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
A team of airline employees surrounded by flight deck controls, with a variety of aircraft outside.
FTAI Aviation Ltd. (NASDAQ:FTAI)
Average Upside Potential: 43.45%
Number of Hedge Fund Holders: 54
FTAI Aviation Ltd. (NASDAQ:FTAI) serves as an integrated full-service provider of aftermarket power and maintenance for the most widely used commercial jet engines. It has a focus on the Maintenance, Repair, and Exchange (MRE) of CFM56 and V2500 engines. The company operates two segments, Aviation Leasing and Aerospace Products.
FTAI Aviation Ltd. (NASDAQ:FTAI) is positioned as a global, industry-leading supplier of good-quality CFM56 engines, materials, and modules. The company owns and acquires high-quality aviation equipment essential for the transportation of goods and people globally. FTAI continues to focus on aerospace products and aviation leasing assets that could drive robust cashflows with strong earnings growth potential.
For its most recent quarter, Q3’24, the company reported a strong adjusted EBITDA of $232 million, posting a growth of 50.5% over the year. FTAI Aviation acquired 39 engines and 3 aircraft during the quarter. The Aerospace Product segment is consistently generating adjusted EBITDA margins of between 30% to 40% and recorded a solid adjusted EBITDA of $101.8 million. Meanwhile, the leasing segment witnessed $136 million in adjusted EBITDA which has grown from $125 million in the preceding quarter.
Overall FTAI ranks 10th on our list of the stocks that will go to the moon according to analysts. While we acknowledge the potential of FTAI as an investment, our conviction lies in the belief that some deeply undervalued AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for a deeply undervalued AI stock that is more promising than FTAI but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.
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