What Happened?
Shares of aircraft leasing company FTAI Aviation (NASDAQ: FTAI) jumped 8% in the afternoon session after the stock extended its positive momentum as the company provided improved financial guidance, raising its market share target, operating profits, and free cash flow estimates.
FTAI Aviation increased its 2025 adjusted free cash flow guidance by $100 million to $750 million and also raised its business segment EBITDA forecast. The company outlined its growth ambitions at a recent conference, targeting a significant increase in its market share (9% market share this year vs. previous est. of 5%) of the engine maintenance sector with a long-term target of roughly a quarter of its addressable market.
To achieve the targets, FTAI provided some operational updates, including plans to double production in Montreal and Rome, while increasing module production by 33% across the board. This news comes as the broader aviation industry is experiencing robust demand, with passenger traffic projected to hit record levels in 2025.
Separately, FTAI finalized the sale of 39 aircraft for an aggregate net purchase price of approximately $418.1 million. This transaction is part of the company's strategic capital initiative with institutional investors, in which FTAI will retain a 20% limited partnership interest. Adding to the positive momentum.
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What Is The Market Telling Us
FTAI Aviation’s shares are extremely volatile and have had 48 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 17 days ago when the stock gained 3.2% on the news that the broader market rallied on hopes for potential interest rate cuts, which boosted travel-related stocks.
The rally follows hints from the head of the U.S. Federal Reserve that interest rate cuts may be on the way. Lower interest rates can stimulate the economy by making borrowing cheaper for consumers and businesses, which can lead to increased household spending. The travel industry often benefits from this environment, as consumers may feel more confident about spending on discretionary items like travel. This positive sentiment for the entire sector appears to be lifting shares of companies like FTAI Aviation.
FTAI Aviation is up 15.6% since the beginning of the year, and at $167.04 per share, it is trading close to its 52-week high of $174.96 from November 2024. Investors who bought $1,000 worth of FTAI Aviation’s shares 5 years ago would now be looking at an investment worth $10,675.
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