Willis Lease Finance Corporation (WLFC): A Bull Case Theory

Company Overview - Willis Lease Finance Corporation (WLFC) is an independent aircraft engine leasing and servicing company, operating as a fully integrated aviation ecosystem with $3.4 billion in owned and managed assets [2] - Founded in 1985, the company is controlled by the Willis family, which holds approximately 60% of the business [3] - WLFC provides a range of services including leasing, engine repairs, used serviceable materials, end-of-life planning, airframe maintenance, and in-house consulting [2][3] Investment Thesis - The investment case for WLFC is based on two main pillars: lack of analyst coverage and minimal institutional ownership, leading to compressed valuation multiples despite strong fundamentals [4] - WLFC's stock has increased by approximately 300% year-to-date, yet it still trades at a significant discount compared to its closest peer, FTAI, despite having a larger engine fleet and broader service capabilities [4] - The company is well-positioned to benefit from industry tailwinds such as OEM delivery delays, next-generation engine durability issues, and a global shortage of MRO capacity, which have increased demand for spare engines and repairs [5] Financial Performance and Outlook - WLFC has experienced strong post-COVID growth in lease rents and maintenance reserves, with improving visibility and multiple catalysts for growth [6] - The author suggests that a rerating towards peer multiples could support a significant upside, with a base case price target near $300 [6] - The company's in-house repair centers and used serviceable materials inventory reduce reliance on external MROs and OEMs, lowering costs and improving turnaround times [5]