Dahlman Rose Initiating Coverage On Fly Leasing (FLY)

Dahlman Rose & Co. is initiating coverage on Fly Leasing Ltd(ADR) FLY, with a Buy rating and a $16.50 price target. In a note sent to investors, Dahlman Rose writes, "As a pure play on aircraft leasing, in the sense that it does not order aircraft unless a contract is in place, FLY Leasing's growth is somewhat difficult to forecast. The company's earnings generally decline as aircraft come off lease and are re-leased at amounts lower than prior leases, and without newer aircraft or an increasing portfolio, FLY's earnings will continue to decline. We use Net Asset Value as our preferred valuation methodology. We believe these shares track airline company equities, even though the risk is significantly lower with a leasing company. The stock will perform well as long as the airline industry continues to perform well." Shares of FLY closed at $13.28, a gain of 2 cents on Friday.