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Copa Holdings S.A. (CPA)
:CPA
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Copa Holdings
(NYSE:CPA)
Rating:79Outperform
Price Target:
$128.00
▲(12.63%Upside)
Positive Factors
Cost Management
Copa has outperformed its 2023 investor day targets on reducing non-fuel costs, which supports profitability.
Financial Performance
EPS of US$4.28/sh was 10% above consensus and 9% above MSe, showing strong financial performance.
Traffic and Capacity Growth
Copa's total traffic increased 7.5% year-over-year, indicating positive growth for the company.
Negative Factors
Revenue Per Available Seat Mile (RASM)
2025 EBIT margin guide increased due to lower fuel cost, despite lower RASM, indicating challenges in revenue generation.
Yield Performance
Copa has experienced declines in yields for the past 6 quarters, which could pressure revenue growth.
Copa Holdings (CPA) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$4.48B
Dividend Yield5.92%
Average Volume (3M)318.88K
Price to Earnings (P/E)7.7
Beta (1Y)0.73
Revenue Growth-1.06%
EPS Growth5.86%
CountryUS
Employees7,909
SectorGeneral
Sector StrengthN/A
IndustryAirlines, Airports & Air Services
Share Statistics
EPS (TTM)4.28
Shares Outstanding30,234,830
10 Day Avg. Volume268,914
30 Day Avg. Volume318,878
Financial Highlights & Ratios
PEG Ratio0.01
Price to Book (P/B)2.26
Price to Sales (P/S)0.00
P/FCF Ratio37.39
Enterprise Value/Market Cap1.10
Enterprise Value/Revenue0.36
Enterprise Value/Gross Profit3.87
Enterprise Value/Ebitda1.21
Forecast
1Y Price Target
$142.25Price Target Upside25.16% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering4
Copa Holdings Business Overview & Revenue Model
Company DescriptionCopa Holdings, S.A. (CPA) is a leading Latin American provider of airline passenger and cargo services. The company operates through its main subsidiary, Copa Airlines, which offers flights to various destinations across North, Central, and South America, as well as the Caribbean. Headquartered in Panama City, Panama, Copa Holdings is known for its extensive network and high-quality service, making it a preferred choice for travelers in the region.
How the Company Makes MoneyCopa Holdings makes money primarily through the sale of airline tickets for passenger travel. This includes both international and domestic flights, with a significant portion of revenue derived from its hub operations at Tocumen International Airport in Panama City, which connects passengers to various destinations. In addition to passenger services, the company also generates revenue from cargo and mail transportation services, as well as through ancillary services such as baggage fees, seat selection, and onboard sales. Partnerships with other airlines through codeshare agreements and its membership in the Star Alliance contribute to its revenue by expanding its reach and offering connecting flight opportunities. Additionally, strategic management of fuel costs, fleet optimization, and operational efficiency play crucial roles in maintaining profitability.
Copa Holdings Earnings Call Summary
Earnings Call Date:May 07, 2025
(Q1-2025)
| % Change Since: 19.36%|
Next Earnings Date:Aug 06, 2025
Earnings Call Sentiment Positive
Copa Holdings reported a strong financial performance with a solid operating margin, increased capacity, and effective cost management. However, challenges such as decreased unit revenues and competitive pressures in specific markets were noted. The overall sentiment leans towards positive due to the company's robust financial position and strategic initiatives.Q1-2025 Updates
Positive Updates
Strong Operating Margin
Copa Holdings reported a 23.8% operating margin in Q1 2025, showing resilience despite a lower year-over-year passenger yield environment.
Capacity and Passenger Traffic Increase
Capacity increased by 9.5% year-over-year, and passenger traffic grew by 10.1% compared to Q1 2024, leading to a load factor increase of 0.4 percentage points to 86.4%.
Cost Management Success
Unit costs excluding fuel decreased by 4.3%, driven by lower sales and distribution expenses and reductions in passenger servicing costs.
On-Time Performance and Network Expansion
Copa Airlines achieved a 90.8% on-time performance and announced new services to San Diego, Salta, and Tucuman, enhancing its network.
Strong Financial Position
Copa Holdings ended the quarter with over $1.3 billion in cash and short- and long-term investments, representing 39% of the company's last 12-month revenues.
Dividend Payment
The company announced a second dividend payment of $1.61 per share, reflecting its commitment to return value to shareholders.
Negative Updates
Decrease in Unit Revenues
Unit revenues (RASM) decreased by 8.1% due to a 9.1% decrease in passenger yields, influenced by additional industry capacity and a weaker currency environment in Latin America.
Challenges in Specific Markets
Weakness in yields was observed in Brazil due to the currency situation, and competitive capacity pressures were noted in Mexico and Central America.
Company Guidance
During Copa Holdings' Q1 2025 earnings call, the company provided several key metrics and guidance highlights. The operating margin for the first quarter was reported at 23.8%, reflecting a robust start to the year despite a challenging environment with a 9.1% decline in passenger yields. Capacity increased by 9.5% year-over-year, while passenger traffic grew by 10.1%, leading to a load factor of 86.4%, a 0.4 percentage point improvement from the previous year. Unit revenues (RASM) were noted at $11.05, representing an 8.1% decrease compared to Q1 2024, primarily due to increased industry capacity and weaker regional currencies. However, unit costs excluding fuel (CASMx) decreased by 4.3% to $5.08. On-time performance was strong at 90.8%, with a completion factor of 99.9%. For the full year, Copa revised its operating margin guidance upward to a range of 21% to 23%, driven by expectations of lower fuel costs and steady passenger demand. The company plans to grow capacity by 7% to 8% year-over-year, with assumptions including a load factor of approximately 86.5%, unit revenues of $0.112, and an all-in fuel price of $2.40 per gallon.Copa Holdings Financial Statement Overview
Summary
Copa Holdings demonstrates solid financial health with strong profitability, stable leverage, and robust cash flow. The income statement shows a consistent gross profit margin and significant net profit improvements. The balance sheet reveals prudent financial leverage with a solid equity base. Cash flow management is excellent, indicating effective capital use and cash generation.Income Statement
Copa Holdings shows strong profitability with a consistent Gross Profit Margin of around 37% in TTM, indicating efficient cost management. The Net Profit Margin has improved significantly over the years, reaching about 17.7% in TTM, reflecting effective operational strategies. Revenue growth is stable, with minor fluctuations, and EBIT and EBITDA margins are healthy at 21.8% and 27.5% respectively, demonstrating robust operational performance.85
Very Positive
Balance Sheet
The company maintains a solid financial position, evidenced by a debt-to-equity ratio of 0.78 in TTM, indicating prudent financial leverage. The Return on Equity is impressive at 24.5%, showcasing strong profitability relative to shareholder equity. The equity ratio stands at 43.2%, reflecting a strong equity base. Overall, the balance sheet is stable with a healthy mix of debt and equity financing.80
Positive
Cash Flow
Copa Holdings exhibits strong cash flow management, with a significant Operating Cash Flow to Net Income Ratio of 1.6, suggesting excellent cash conversion efficiency. The Free Cash Flow to Net Income Ratio is also strong at 1.6, indicating effective use of capital. Free Cash Flow has grown substantially, reflecting improved cash generation capabilities.78
Positive
| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 3.45B | 3.45B | 3.46B | 2.97B | 1.51B | 801.00M |
| Gross Profit | 1.28B | 1.23B | 1.27B | 1.07B | 550.06M | -229.00M |
| EBITDA | 948.62M | 1.12B | 1.08B | 741.68M | 370.51M | -298.40M |
| Net Income | 609.23M | 608.53M | 514.10M | 348.05M | 43.84M | -598.61M |
Balance Sheet | ||||||
| Total Assets | 5.75B | 5.74B | 5.20B | 4.69B | 4.25B | 3.85B |
| Cash, Cash Equivalents and Short-Term Investments | 916.35M | 1.20B | 915.18M | 934.75M | 1.02B | 889.88M |
| Total Debt | 1.94B | 2.00B | 1.75B | 1.68B | 1.60B | 1.39B |
| Total Liabilities | 3.27B | 3.37B | 3.07B | 3.20B | 2.95B | 2.57B |
| Stockholders Equity | 2.48B | 2.37B | 2.12B | 1.49B | 1.30B | 1.28B |
Cash Flow | ||||||
| Free Cash Flow | 974.21M | 340.51M | 214.91M | 90.26M | -32.71M | -100.00M |
| Operating Cash Flow | 974.21M | 996.85M | 1.04B | 740.95M | 462.61M | -39.52M |
| Investing Cash Flow | -782.86M | -343.14M | -543.00M | -555.91M | -373.04M | -93.76M |
| Financing Cash Flow | -197.05M | -219.65M | -394.03M | -273.69M | 2.44M | 93.61M |
Copa Holdings Technical Analysis
Positive
113.65
Price Trends
103.74
Positive
97.10
Positive
93.45
Positive
Market Momentum
2.18
Negative
66.76
Neutral
67.76
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CPA, the sentiment is Positive. The current price of 113.65 is above the 20-day moving average (MA) of 107.28, above the 50-day MA of 103.74, and above the 200-day MA of 93.45, indicating a bullish trend. The MACD of 2.18 indicates Negative momentum. The RSI at 66.76 is Neutral, neither overbought nor oversold. The STOCH value of 67.76 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for CPA.
Copa Holdings Risk Analysis
Copa Holdings disclosed 50 risk factors in its most recent earnings report. Copa Holdings reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Copa Holdings Peers Comparison
Overall Rating
UnderperformOutperform
Sector (56)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
79 Outperform | $4.48B | 7.73 | 26.07% | 5.92% | -1.06% | 5.86% | |
74 Outperform | $6.04B | 19.68 | 8.90% | ― | 20.82% | 47.79% | |
66 Neutral | $19.68B | 44.35 | 5.63% | 2.08% | 3.26% | 27.77% | |
64 Neutral | $7.57B | 14.94 | -21.27% | ― | 1.92% | 36.07% | |
56 Neutral | $5.71B | 21.48 | -28.61% | 5.64% | 10.78% | -31.71% | |
47 Neutral | $1.50B | ― | -11.30% | ― | -3.02% | 66.90% |
* General Sector Average
Performance Comparison
CPA
Copa Holdings
110.38
20.32
22.56%
ALK
Alaska Air
52.54
14.13
36.79%
JBLU
JetBlue Airways
4.39
-1.71
-28.03%
LUV
Southwest Airlines
37.13
10.23
38.03%
AAL
American Airlines
12.22
1.54
14.42%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.