UPDATE: Citigroup Reiterates Buy Rating, Raises PT on Aercap Holdings

In a report published Friday, Citigroup reiterated its Buy rating on Aercap Holdings NV (NYSE: AER), and slightly raised its price target from $18.60 to $19.20.Citigroup noted, “Having re-purchased a total of $282.7m of shares in the last 15 months, AER has Board authority to re-purchase another $104m's worth. At the current share price of $12.78, AER could theoretically re-purchase another 8.14m shares (6.5% of current share capital), which we estimate would be a further 7% accretive to annualized EPS. We are confident that AER will re-purchase more shares up to the current authorization as long as the share price remains below BVPS of $17.21 (end 2Q12 - or $18.19 estimated for end 3Q12). We note that Cerberus has a remaining shareholding of 10.7% (13.3m shares). Beyond this, we believe share re-purchases could be limited by (i) a potential increase in funding costs due to increased debt leverage; (ii) reduced liquidity of free float shares and therefore potential waning investor interest in the stock; and (iii) the reduced ability to pursue further aircraft acquisitions for growth. We note that it was recently reported that AER and AMR had agreed to a further 11 B737-800 sale and leasebacks. We would not rule out AER seeking a merger opportunity or taking itself private, although the recent re-purchase of Cerberus' shares may have reduced the probability of these events occurring. We expect strategic clarity at its investor day on September 12.”Aercap Holdings NV closed on Thursday at $12.78.