Chorus Aviation (Chorus Aviation Stock Quote, Charts, News, Analysts, Financials TSX:CHR) is ready to gain altitude, according to Corey Hammill of Paradigm Capital, who maintained a “Buy” rating while raising his target price in an update to clients on Monday. Halifax-based Chorus Aviation is a Canadian airline holding company operating in the Regional Aviation Services (ACMI and charter operations, aircraft leasing, and maintenance and repairs) and Regional Aircraft Leasing (leased to third-party air operators) segments. Chorus Aviation has had a busy start to the month of May, releasing its first quarter financial results for 2022 and completing the acquisition of Falko Regional Aircraft Limited, together with its affiliates and equity interests, both of which served as the basis for Hammill’s latest report. The company’s financial quarter was headlined by $83.3 million in EBITDA, which was roughly in line with the $83.9 million projection set out by Paradigm Capital Markets, while being slightly below the $86 million projection set out by the consensus, with the difference coming from $3.7 million in unmodeled stock-based compensation. Contracted flying accounted for $51.5 million (61.8 per cent) of the company’s EBITDA in the quarter with third-party leasing accounting for the rest. Chorus Aviation was also busy collecting revenue as it brought in 92 per cent of its third-party lease revenue, up from 83 per cent sequentially and 62 per cent year-over-year. From a liquidity standpoint, Chorus Aviation had $200 million in cash and other assets available at the end of the quarter, with expected capital expenditures ranging between $21 million and $33 million for 2022, along with $10 million to $17 million in aircraft acquisitions and improvements. "I sincerely thank the Chorus group of employees for all their hard work and dedication over the last two difficult years,” said Joe Randell, President and Chief Executive Officer of Chorus Aviation in the company’s May 5 press release. “Collectively, we remain energized and excited about our prospects. We are witnessing positive indications that demand for air travel is significantly increasing in many parts of the world.” The financial results come directly off the heels of Chorus Aviation’s $1.1 billion acquisition of U.K.-based Falko Regional Aircraft Limited, with the combined company now boasting a portfolio of 353 owned, operated and leased aircraft and 32 airline customers in 23 countries. The Falko acquisition brings new high-profile clients into the fold, including British Airways, American Airlines and Delta, while in the process increasing the total portfolio value from US$2.5 billion to US$4.5 billion. “The acquisition has expanded Chorus’ business to include an established and growing regional aircraft asset management, which is both new to Chorus and unique in aviation finance,” Hammil said. “The shift to asset light will increase cash flow generation and improve return on invested capital.” To make things work financially, Brookfield made a US$374 million (C$470 million) strategic investment in Chorus, which funded the full $445 million cash component, headlined by US$300 million in preferred equity at 8.75 per cent interest payable in cash or 9.5 per cent interest payable in kind, with the remainder coming in common shares at $3.70/share, with the 12.5 per cent equity stake also allowing Brookfield to nominate two people to Chorus Aviation’s board of directors. "This transformative acquisition establishes Chorus as the world’s largest aircraft lessor focused on the regional aviation segment and a leading worldwide provider in all aspects of regional aviation,” Randell said on May 3. The recent news and financial results have prompted Hammill to change some of his financial projections, with a particular emphasis on adjusted EBITDA. For 2022, Hammill raised his adjusted EBITDA projection from $356 million to $431 million for an implied margin of 32.9 per cent, while beating the consensus estimate of $382 million. Looking ahead to 2023, Hammill raised his adjusted EBITDA projection from $380 million to $501.3 million for an implied margin of 36 per cent, again coming in ahead of the consensus estimate of $445 million. In terms of overall net income, Hammill forecasts $1.31 billion in revenue in 2022 for a potential year-over-year increase of 27.9 per cent, while his 2023 forecast is set at $1.39 billion for a potential year-over-year increase of 6.4 per cent. “Chorus continues to remain sheltered from typical cost pressures faced by most companies in the airline industry,” Hammill said. “As the world continues with its recovery, we expect CHR’s regional leasing business will be its primary source of revenue growth, which will also help reduce its customer concentration.” Along with his "Buy" rating, Hammill gave a new target of $7.50 (previously $5.75), which at press time represented a projected one-year return of 105 per cent. Chorus Aviation has seen its share price creep up to a 3.7 per cent return since the start of 2022, beginning its climb after dropping to a 2022 low of $3.39/share on January 24 and rising to a 2022 high of $4.46/share on February 18, though it has dropped closer to the $3.50/share value where it began 2022.