DAVY VIEW

Air Lease’s Q4 results revealed the earnings resilience (net income $107m), strong cash collection (88% in Q4 versus 86% in Q3) and encouraging tone that we were expecting and which we believe warrant continued re-rating towards 1.0x price/book (0.91x at close). Notably, while agreed rent deferrals continue to climb ($240m at February 22nd), they do so on a gradual basis (only +$40m versus November) and, more importantly, 40% of this has already been repaid. The outlook for the company – which has posted >$100m net income in each quarter post-COVID – is enhanced by its commerciality in the sale-leaseback market and its ability to finance its growth at record-low levels. These results reaffirm our belief in the deep value credentials of Air Lease.