Dahlman Rose Raises Its PT On Aircastle Limited To $15 After Reporting Solid Earnings

Dahlman Rose is estimating Aircastle Limited's AYR 2Q11 EPS of $0.26 and revenue of $142 million, which is down slightly from the $157.9 million reported in the first quarter. The company has one aircraft it is currently re-marketing, but because its engines need maintenance, the aircraft is still on the ground. Aircastle successfully leased three aircrafts earlier in the quarter; these aircrafts will contribute to revenue in the current quarter. Aircastle is investing between $500 million and $1.0 billion in five aircraft: three B747-400s that will be converted to freighters and two A320s on lease to a China-based airline. One of the B747-400s is already slotted to undergo conversion this year, while the others will remain with the airline they are on-lease with until next year. The two A320s will remain on the existing leases. Given the growth of Aircastle, Dahlman is raising its PT to $15, up from a prior estimate of $13 and based on 0.9x book value. Aircastle reported lease revenue of $141.1 million in 1Q11 and total revenue of $157.9 million. Net income was $42.7 million compared to $18.9 million, or $0.54/share compared to $0.24/share last year. On an adjusted basis, EPS were $0.41 and compared favorably to Dahlman's estimate and the consensus estimate of $0.40. AYR closed Wednesday at $12.56