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LATAM Airlines Group SA Sponsored ADR (LTM)
NYSE:LTM
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LATAM Airlines Group SA Sponsored ADR
(NYSE:LTM)
77Outperform
Positive Factors
Currency Impact
A weaker dollar should benefit large cap US relative EPS revisions.
Tariff Developments
Incrementally positive news on a potential tariff deal with China and hope for a more dovish Fed lifted stocks.
Negative Factors
Earnings and Confidence
Further deterioration in earnings and/or corporate confidence could lead to a labor cycle and negatively impact equities.
Market Uncertainty
The back and forth on policy is likely to exacerbate uncertainty for businesses and consumers.
LATAM Airlines Group SA Sponsored ADR (LTM) vs. S&P 500 (SPY)
Market Cap
$9.70B
Dividend Yield2.02%
Average Volume (3M)394.96K
Price to Earnings (P/E)9.0
Beta (1Y)0.70
Revenue Growth6.41%
EPS Growth49.58%
CountryUS
Employees39,005
SectorIndustrials
Sector Strength78
IndustryAirlines, Airports & Air Services
Share Statistics
EPS (TTM)3.56
Shares Outstanding302,218,930
10 Day Avg. Volume463,297
30 Day Avg. Volume394,960
Financial Highlights & Ratios
PEG Ratio0.18
Price to Book (P/B)N/A
Price to Sales (P/S)0.00
Price to Cash Flow (P/CF)0.00
P/FCF Ratio0.00
Enterprise Value/Market Cap1.48
Enterprise Value/RevenueN/A
Enterprise Value/Gross Profit4.40
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$38.00Price Target Upside18.75% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering2
LATAM Airlines Group SA Sponsored ADR Business Overview & Revenue Model
Company DescriptionLATAM Airlines Group SA Sponsored ADR (LTM) is a leading airline group in Latin America, with its headquarters in Santiago, Chile. The company operates in the passenger and cargo aviation sectors, providing an extensive network of domestic and international flights across South America, North America, Europe, and Oceania. LATAM Airlines Group was formed through the merger of LAN Airlines and TAM Airlines, making it one of the largest airline groups in the region. The company is committed to delivering high-quality air travel services, focusing on safety, customer satisfaction, and operational efficiency.
How the Company Makes MoneyLATAM Airlines Group generates revenue primarily through its passenger and cargo transportation services. The company's main revenue stream comes from the sale of airline tickets to passengers traveling on its extensive route network. Additionally, LATAM earns income from its cargo operations, which involve the transportation of goods and freight across its passenger and dedicated cargo flights. Ancillary services, such as baggage fees, seat selection, and in-flight sales, also contribute to its revenue. The company benefits from strategic alliances and codeshare agreements with other international airlines, expanding its market reach and enhancing its service offerings. LATAM's operational efficiency and cost management strategies are vital in maintaining profitability in the highly competitive airline industry.
LATAM Airlines Group SA Sponsored ADR Financial Statement Overview
Summary
LATAM Airlines shows a strong recovery with robust profit margins and efficient cash generation. Despite reduced leverage, the company still relies significantly on debt, which is a risk if market conditions worsen. Continued revenue growth and prudent debt management are essential.Income Statement
The income statement reveals a strong recovery trajectory for LATAM Airlines, with revenue increasing to $12.91 billion (TTM) from $12.83 billion annually. This growth is supported by a robust gross profit margin of 25.88% and a net profit margin of 8.32%. The consistent EBIT and EBITDA margins of 13.21% and 18.24% respectively, indicate operational efficiency. However, the revenue growth rate decelerated compared to previous years, which could be a consideration for future performance.85
Very Positive
Balance Sheet
The balance sheet shows improved financial stability, with stockholders' equity increasing to $950 million. The debt-to-equity ratio decreased to 7.46, signifying reduced leverage. The equity ratio of 5.99% suggests that the company still relies heavily on debt, which poses a risk if market conditions worsen. The return on equity (ROE) is strong at 113.05%, reflecting effective utilization of equity to generate profit.70
Positive
Cash Flow
Cash flow analysis showcases a solid performance with an operating cash flow to net income ratio of 3.04, indicating healthy cash generation relative to profitability. Free cash flow improved to $1.63 billion (TTM), though the free cash flow growth rate has decelerated. The free cash flow to net income ratio of 1.52 further emphasizes efficient cash utilization. However, high capital expenditures could impact future cash flows.78
Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 12.83B | 11.64B | 9.52B | 4.88B | 4.33B | Gross Profit |
| 3.27B | 2.82B | 2.48B | -79.47M | -444.11M | EBIT |
| 1.54B | 1.08B | 134.87M | -3.43B | -1.67B | EBITDA |
| 2.34B | 1.28B | 2.26B | -3.34B | -4.52B | Net Income Common Stockholders |
| 976.97M | 581.83M | 1.34B | -4.65B | -4.55B |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 1.96B | 1.85B | 1.72B | 1.12B | 1.75B | Total Assets |
| 15.25B | 14.67B | 13.21B | 13.31B | 15.65B | Total Debt |
| 7.15B | 7.04B | 6.78B | 10.40B | 10.85B | Net Debt |
| 5.19B | 5.32B | 5.57B | 9.35B | 9.16B | Total Liabilities |
| 14.54B | 14.23B | 13.18B | 20.38B | 18.09B | Stockholders Equity |
| 723.27M | 450.30M | 42.28M | -7.06B | -2.44B |
| Cash Flow | Free Cash Flow | |||
| 1.69B | 1.40B | -733.86M | -859.86M | -894.39M | Operating Cash Flow |
| 3.11B | 2.26B | 96.80M | -184.10M | -494.70M | Investing Cash Flow |
| -1.17B | -659.50M | -748.96M | -542.65M | 33.61M | Financing Cash Flow |
| -1.56B | -1.15B | 854.96M | 109.64M | 1.12B |
LATAM Airlines Group SA Sponsored ADR Risk Analysis
LATAM Airlines Group SA Sponsored ADR disclosed 48 risk factors in its most recent earnings report. LATAM Airlines Group SA Sponsored ADR reported the most risks in the “Production” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
LATAM Airlines Group SA Sponsored ADR Peers Comparison
Overall Rating
UnderperformOutperform
Sector (64)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
78 Outperform | $3.89B | 6.48 | 27.07% | 6.94% | -0.48% | 13.87% | |
77 Outperform | $9.70B | 8.99 | 138.69% | 2.02% | 6.41% | 49.58% | |
76 Outperform | $21.53B | 6.97 | 33.57% | ― | 5.31% | 35.95% | |
64 Neutral | $4.28B | 11.80 | 5.30% | 250.74% | 4.12% | -9.02% | |
59 Neutral | $17.01B | 35.45 | 5.63% | 2.41% | 3.26% | 27.77% | |
58 Neutral | $6.94B | 12.15 | -21.27% | ― | 1.92% | 36.07% | |
43 Neutral | $1.69B | ― | -11.30% | ― | -3.02% | 66.90% |
* Industrials Sector Average
Performance Comparison
LTM
LATAM Airlines Group SA Sponsored ADR
32.00
7.28
29.45%
CPA
Copa Holdings
94.37
-1.09
-1.14%
JBLU
JetBlue Airways
4.76
-1.17
-19.73%
LUV
Southwest Airlines
29.85
3.07
11.46%
UAL
United Airlines Holdings
74.07
20.10
37.24%
AAL
American Airlines
10.52
-4.13
-28.19%
LATAM Airlines Group SA Sponsored ADR Earnings Call Summary
Earnings Call Date:Apr 28, 2025
(Q4-2024)
| % Change Since: 4.75%|
Next Earnings Date:Aug 12, 2025
Earnings Call Sentiment Positive
The earnings call reflects a strong positive sentiment from LATAM Airlines' performance in 2024, highlighted by record passenger growth, strong financial results, operational excellence, and sustainability achievements. The challenges in revenue per ASK and engine supply chain issues were noted, but the overall outlook remains optimistic.Q4-2024 Updates
Positive Updates
Record Passenger Growth
In 2024, LATAM Airlines transported a record-breaking 82 million passengers, marking a 15% growth compared to the previous year. This solidifies LATAM's position as the largest airline group in South America.
Strong Financial Performance
LATAM Airlines achieved an adjusted operating margin of 12.7% and an adjusted EBITDAR of $3.1 billion for the year 2024. Net income nearly doubled to $977 million compared to 2023.
Operational Excellence and Customer Satisfaction
LATAM reached its highest-ever Net Promoter Score of 51 points, with 56 points for Premium passengers, and achieved the lowest rate of customer complaints in Chile, Brazil, and Peru.
Sustainability Achievements
LATAM was reincorporated into the Dow Jones Sustainability Index and recognized as the fifth most sustainable airline group worldwide, leading in the Americas and the Western Hemisphere.
Negative Updates
Revenue per ASK Decline
There was a 10% year-over-year decrease in consolidated revenues per ASK, impacted by a decline in jet fuel prices and currency depreciation in major markets like Brazil.
Engine Supply Chain Challenges
LATAM faces ongoing challenges with aircraft grounded due to engine supply chain issues from Pratt & Whitney and Rolls-Royce, impacting fleet availability.
Company Guidance
During the Fourth Quarter 2024 LATAM Airlines Group Earnings Conference Call, the management provided several key metrics and guidance for 2025. LATAM achieved a record-breaking 82 million passengers for the year, marking a 15% growth in operations and maintaining a consolidated load factor of nearly 86% for the quarter. The group also reported an adjusted operating margin of 12.7% and adjusted EBITDAR of $3.1 billion, contributing to a full-year net income of $977 million, which nearly doubled the previous year's figure. For 2025, LATAM anticipates capacity growth of 7% to 9%, with revenues projected to reach between $14 billion and $14.5 billion. The company's liquidity stands at 27% of last 12 months' revenues, with adjusted net leverage at 1.7x. The guidance for 2025 includes an adjusted EBITDAR forecast of $3.25 billion to $3.6 billion, supported by a healthy demand environment and disciplined cost management.Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
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.