Price Forecast:

Bullish Case: Strong demand for air travel post-pandemic and strategic fleet updates could drive AL's stock growth, particularly if recent geopolitical tensions ease, fostering a bullish sentiment among investors.

Bearish Case: Continued geopolitical instability and rising interest rates could pressure AL's leasing rates and profitability, especially with high market volatility indicating a potential downside risk.

Potential Outcomes:

1. Price increase due to improved earnings from fleet updates (30%).

2. Continued market volatility leading to a price drop (25%).

3. Stabilization of geopolitical tensions fostering market confidence (20%).

4. Decreased demand for air travel leading to flat performance (25%).

Trading Oracle: Consider initiating a bullish debit spread by buying AL $50 calls and selling $55 calls expiring in early 2025. With the current market uncertainty, this targets a favorable risk/reward ratio of 3:1, leveraging potential growth in prices due to fleet expansions and improving market conditions, aligning with a 70% probability of profit.

October 20, 2024