What Happened?

Shares of aircraft leasing company FTAI Aviation (NASDAQ:FTAI) fell 8.2% in the afternoon session after Reuters reported that Boeing is planning to increase the production of its 787 Dreamliner Jets to 10 planes per month by 2026, which likely means fewer engagements for parts suppliers, including FTAI. 

The older the fleet of commercial aircraft is, the more FTAI tends to benefit due to its maintenance, repair, and overhaul services. Improvements in new deliveries from Boeing and Airbus mean the average age of the fleet falls. Additionally, these Boeing 787 Dreamliners typically are equipped with Rolls-Royce Trent 1000 or General Electric GEnx-1B engines. FTAI mainly makes money from leasing out its fleet of CFM56 engines, which are found in the Boeing 737 and other military aircraft. This announcement is a double negative for FTAI.

The shares closed the day at $135.04, down 9.7% from previous close.

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What The Market Is Telling Us

FTAI Aviation’s shares are quite volatile and have had 18 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 biggest move we wrote about over the last year was 5 months ago when the stock gained 9.2% on the news that Stifel analyst upgraded the stock's rating from Hold to Buy and raised the price target from $69 to $132. The new price target implied a potential 16% upside from where shares traded before the upgrade was announced. The analyst added, "the stock is worth buying given industry dynamics, even if considered expensive."

FTAI Aviation is up 198% since the beginning of the year, but at $135.21 per share, it is still trading 22.7% below 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 $7,204.

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