FTAI Aviation's (FTAI) shift in strategy to a more asset-light business model within its leasing business is expected to drive sustained cash generation for the company, Morgan Stanley said in a note Wednesday.

The investment bank said there could be increased investment in organic growth within the aerospace products business and potential for capital return to shareholders as FTAI reduces the needed investment in leasing.

FTAI also doesn't have debt maturities before 2028 that require paydown or refinancing, providing additional flexibility, according to the note.

Morgan Stanley called the asset-light business model "game changing" for the company's capital structure, estimating net debt to earnings before interest, taxes, depreciation and amortization declining to 1.9x in 2027 from 2.6x in 2025 and debt to equity falling to 1.9x in 2027 from 9.8x in 2025.

Morgan Stanley raised its price target on FTAI to $175 from $138 and maintained its overweight rating.

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