UPDATE: Citigroup Upgrades Fly Leasing to Buy, Lowers PT

In a report published Monday, Citigroup upgraded its rating on Fly Leasing Ltd.

from Neutral to Buy, but slightly lowered its price target from $13.50 to $13.20. Citigroup noted, “We raise our rating from Neutral to Buy (1) and 1 year target price reduced slightly from $13.50 to $13.20. The stock has sold off c.13% since 3Q, mainly because of a fall in portfolio utilization in 3Q. We continue to base our target price on expected market value of the portfolio, less net debt and other net liabilities, one year hence ($13.20 per share – 11% higher than current share price plus c.8% dividend yield). Our target price is reduced slightly due to using latest aircraft market values, which are c.5-6% lower than 6 months ago. Our detailed valuation and associated financial model are included in this note.” Fly Leasing Ltd. closed on Friday at $11.87.