8. FTAI Aviation Ltd. (NASDAQ:FTAI)
Number of Hedge Fund Holders: 33
FTAI Aviation Ltd. (NASDAQ:FTAI) is engaged in owning and acquiring aviation and offshore energy equipment to facilitate global transportation solutions. The Aviation Leasing segment focuses on acquiring and managing aviation assets, including aircraft and engines, which are subsequently leased and sold to various clients. On the other hand, its Aerospace Products segment is engaged in the development, manufacturing, repair, and sale of aircraft engines along with their aftermarket components. Cramer said:
“That stock is too hot for me. I would prefer to be in RTX… I understand this is a momentum stock. I’m not going to say people don’t play it, but it’s too expensive for me.”
While Cramer thinks the stock is too hot, it is worth taking into account that, on September 30, Jefferies analyst Sheila Kahyaoglu raised the price target on FTAI Aviation Ltd. (NASDAQ:FTAI) to $155 from $140 and kept a Buy rating.
The analyst’s projections indicate a potential EBITDA of $1.75 billion by 2026, based on the expectation of handling 750 CFM56 modules at a rate of $1.25 million per module, which is 40% higher than the target. Furthermore, an optimistic scenario of full factory utilization at 1,350 modules could lead to an EBITDA of $2.8 billion.
Moreover, recently, FTAI Aviation Ltd. (NASDAQ:FTAI) made a significant move by completing the acquisition of Lockheed Martin Commercial Engine Solutions, which includes a sizable 526,000-square-foot aircraft engine maintenance and repair facility located in Montréal, Québec.
The facility was obtained from Lockheed Martin Canada, marking an expansion in the company’s Maintenance, Repair, and Exchange (MRE) operations.
With this acquisition, it is better positioned to advance maintenance services offered to airline customers, aligning with its goals of growth in this sector. Integrating the maintenance capabilities of LMCES with those already present at FTAI’s QuickTurn facility in Miami, Florida, allows for increased operational capacity.
Together, these facilities can perform up to 1,350 CFM56 module overhauls and conduct over 500 engine tests annually. Following the acquisition, both facilities will adopt the FTAI Aviation brand, with the Montréal site being rebranded as FTAI Aviation Canada and the Miami facility as FTAI Aviation USA.
Next Century Growth Investors, LLC stated the following regarding FTAI Aviation Ltd. (NASDAQ:FTAI) in its Q2 2024 investor letter:
“FTAI Aviation Ltd. (NASDAQ:FTAI) is an aftermarket aerospace company focused on engine repair and maintenance for commercial airlines. They have carved out a strong competitive position in the CFM56 engine, which is one of the largest commercial aftermarket opportunities, and they recently added the V2500 engine to their addressable market. We believe the aerospace aftermarket will continue to experience strong demand, allowing FTAI to deliver strong revenue and profit growth.”
