Powering AI Growth: FTAI Aviation’s CFM56 Conversions Drive Underappreciated Upside and Justify Higher Price Target

In a report released today, Kristine Liwag from Morgan Stanley reiterated a Buy rating on FTAI Aviation, with a price target of $266.00.

Kristine Liwag has given his Buy rating due to a combination of factors tied to FTAI Aviation’s emerging growth opportunity in aeroderivative gas turbines and its strategic move into power generation for AI data centers. He views the conversion of CFM56 aircraft engines into industrial gas turbines as a structural, underrecognized growth driver that both extends engine asset lives and directly addresses the rapidly increasing power requirements of AI infrastructure. By launching FTAI Power, the company is positioned to capitalize on a supply shortage of traditional industrial gas turbines, which in turn supports stronger valuation multiples for FTAI within the broader Aerospace sector.

Liwag highlights that FTAI Power plans to utilize the company’s existing CFM56 inventory and maintenance expertise to deliver more than 100 converted units per year, each with roughly 25 megawatts of output, creating a sizable incremental revenue and EBITDA opportunity. He factors this new business into his valuation by raising the price target from $220 to $266 per share and lifting the bull-case estimate from $314 to $479 per share, reflecting the improved upside potential. Overall, he sees a favorable risk-reward profile—approximately 2.5x skewed to the upside—which underpins his decision to reiterate an Overweight (Buy) rating on FTAI Aviation.

Liwag covers the Industrials sector, focusing on stocks such as General Dynamics, Lockheed Martin, and Northrop Grumman. According to TipRanks, Liwag has an average return of 14.8% and a 65.29% success rate on recommended stocks.

In another report released on December 30, BTIG also reiterated a Buy rating on the stock with a $230.00 price target.