BA - AerSale: Overreaction To Q3 Earnings Presents A Buying Opportunity

• We are even more confident in our investment in AerSale following its Q3 earnings report.
• Although the AerAware catalysts have been delayed, this “bad news” is far outweighed by AerSale confirming that FAA approval and an initial large order for AerAware is a virtual lock.
• The Q3 earnings miss was due to the lumpiness of the monetization of its 757 fleet rather than a deterioration in fundamentals. AerSale's strong Q4 guidance supports this conclusion.
• AerSale's core business is poised for significant growth in FY'22 due to several tailwinds including continued monetization of its 757s, increased availability of used aircraft for sale and improving travel trends.
• We reiterate our Strong Buy recommendation and $47 price target for AerSale shares.

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