Grupo Aeromexico, S.A.B. de C.V. Unsponsored ADR (AERO) has received a new Buy rating, initiated by Morgan Stanley analyst, Jens Spiess.
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Jens Spiess has given his Buy rating due to a combination of factors highlighting Grupo Aeromexico’s strong position and potential for growth. He believes that the market is underestimating the company’s earnings capacity and views its current valuation discount to full-service peers as unwarranted. Grupo Aeromexico benefits from industry-wide premiumization trends, particularly as consumer spending on premium travel options continues to rise post-pandemic.
The company’s competitive edge stems from its position as Mexico’s only legacy carrier, which allows it to leverage a premium product offering and a strategically lean cost structure. This includes a rare three-class service network, providing higher revenue through premium pricing, and significant cost efficiencies achieved post-Chapter 11 restructuring. Furthermore, Grupo Aeromexico trades at a discount relative to global and regional full-service carriers, despite its sustainable profitability levels and potential future improvements in profitability. These factors underpin Jens Spiess’s optimistic outlook and price target of $30 per ADS, implying significant upside potential.
According to TipRanks, Spiess is ranked #3027 out of 10144 analysts.
In another report released today, Barclays also initiated coverage with a Buy rating on the stock with a $27.00 price target.