Morgan Stanley Sees 'Much Improved' Risk Reward In Aircastle, Upgrades

In a report published on Tuesday, analysts at Morgan Stanley upgraded Aircastle LTD AYR from Under-Weight to Equal-Weight, while raising the price target from $20 to $22. The analysts expect the company's risk-reward profile to be more balanced, going forward. The fundamentals of the leasing cycle are favorable for Aircastle, while the company's risk profile is improving. In addition, through 2014, the company has taken steps to reduce its exposure to the air freight market, which has been a riskier market for Aircastle. The company intends to reduce its exposure to this market further down to below 10 percent by reducing cargo exposure in the coming years. "We've also seen AYR decrease its overall fleetage, increase its weighted average lease term and lower its average weighted interest cost. As such, we believe AYR has prudently taken the steps to de-risk its business and we see a more balanced risk-reward profile going forward," the analysts said.