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LATAM Airlines Group SA Sponsored ADR
(NYSE:LTM)
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Rating:64Neutral
Price Target:
$60.00
▲(19.64% Upside)
Action:Reiterated
Date:05/09/26
The score is driven primarily by improving profitability and cash generation, but capped by elevated leverage that increases downturn sensitivity. Valuation is a clear positive (low P/E and moderate yield), while technical signals are mixed/neutral. Earnings-call commentary supports underlying strength but highlights significant near-term fuel-cost headwinds and limited forward visibility.
Positive Factors
Profitability recovery
LATAM has rebuilt recurring profitability across 2023–2025 into TTM, with materially higher operating margins and record quarterly margins in Q1. Sustained margin expansion reflects better pricing, network mix and capacity management, supporting durable earnings power through the cycle.
Negative Factors
Elevated leverage
High absolute debt and a thin equity base leave capital structure aggressive for a cyclical carrier, reducing financial flexibility. In downturns interest and covenant pressure can limit investment, constrain strategic responses and amplify downside risk despite recent profitability improvements.
Read all positive and negative factors
Positive Factors
Negative Factors
Profitability recovery
LATAM has rebuilt recurring profitability across 2023–2025 into TTM, with materially higher operating margins and record quarterly margins in Q1. Sustained margin expansion reflects better pricing, network mix and capacity management, supporting durable earnings power through the cycle.
Read all positive factors
LATAM Airlines Group SA Sponsored ADR (LTM) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$15.37B
Dividend Yield2.9%
Average Volume (3M)761.59K
Price to Earnings (P/E)9.2
Beta (1Y)0.87
Revenue Growth16.19%
EPS Growth62.18%
CountryUS
Employees39,005
SectorGeneral
Sector StrengthN/A
IndustryAirlines, Airports & Air Services
Share Statistics
EPS (TTM)5.60
Shares Outstanding287,108,000
10 Day Avg. Volume718,998
30 Day Avg. Volume761,592
Financial Highlights & Ratios
PEG Ratio0.19
Price to Book (P/B)11.83
Price to Sales (P/S)1.12
P/FCF Ratio10.71
Enterprise Value/Market Cap<0.01
Enterprise Value/Revenue<0.01
Enterprise Value/Gross Profit<0.01
Enterprise Value/Ebitda<0.01
Forecast
1Y Price Target
$69.90Price Target Upside39.38% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering5
EPS Forecast (FY)4.92
Revenue Forecast (FY)$17.14B
LATAM Airlines Group SA Sponsored ADR Business Overview & Revenue Model
Company Description
LATAM Airlines Group S.A., encompassing its various subsidiaries, specializes in providing both passenger and freight air transport services. The company's vast operational footprint extends across multiple continents, covering Chile, Peru, Ecuado...
How the Company Makes Money
LATAM Airlines Group primarily makes money by selling air transportation and related services. Key revenue streams include: (1) Passenger revenue: income from selling airline tickets for domestic and international flights, with pricing influenced ...
LATAM Airlines Group SA Sponsored ADR Earnings Call Summary
Earnings Call Date:May 05, 2026
(Q1-2026)
| % Change Since: |
Next Earnings Date:Aug 04, 2026
Earnings Call Sentiment Positive
The call conveys a positive tone driven by record first-quarter results: strong top-line growth (+21.7% revenue), robust margins (~19.8% adjusted operating margin), healthy passenger demand and premium mix expansion, solid cash generation and a strong balance sheet (liquidity $4.1B, net leverage 1.3x). However, significant near-term headwinds from a sharp rise in jet fuel costs (>$700M expected in Q2), anticipated compression of Q2 margins to mid- to low single-digits, rising unit costs ex-fuel and limited forward visibility temper the outlook. Management is taking a conservative stance in guidance and positioning the company to withstand a volatile period. Overall, the strength of operating results and the balance sheet outweigh near-term fuel-driven risks, but the situation calls for cautious monitoring.Positive Updates
Record Quarterly Revenue and Profitability
Revenue reached $4.1 billion, a 21.7% increase year-over-year; adjusted EBITDA was $1.3 billion and adjusted operating margin expanded to 19.8% (up ~3 percentage points YoY), the highest quarterly operating margin in company history; net income was $576 million, up ~62% YoY, with a net margin around 14%.
Negative Updates
Significant Near-Term Fuel Cost Headwind
Management expects additional jet fuel expenses of more than $700 million in Q2 (assumes $170/bbl for Q2 and Q3 and $150/bbl for Q4); fuel price spike driven by Middle East conflict will materially affect results starting in Q2.
Read all updates
Q1-2026 Updates
Positive
Negative
Record Quarterly Revenue and Profitability
Revenue reached $4.1 billion, a 21.7% increase year-over-year; adjusted EBITDA was $1.3 billion and adjusted operating margin expanded to 19.8% (up ~3 percentage points YoY), the highest quarterly operating margin in company history; net income was $576 million, up ~62% YoY, with a net margin around 14%.
Read all positive updates
Company Guidance
LATAM replaced its full‑year 2026 guidance with a focused set of metrics: it assumes jet fuel market prices of $170/barrel for Q2 and Q3 and $150/barrel for Q4 (versus the prior $90/bbl assumption), expects passenger unit cost ex‑fuel of $0.045–$0.047, forecasts adjusted EBITDA of $3.8–$4.2 billion, targets net leverage at or below 1.8x and liquidity of at least $4.5 billion, and flags more than $700 million of additional fuel expense in Q2; management expects a mid‑ to low‑single‑digit adjusted operating margin in Q2, is not providing top‑line or capacity guidance given uncertainty, and notes the guidance reflects disclosed hedging contracts through end‑April while using market fuel price references.LATAM Airlines Group SA Sponsored ADR Financial Statement Overview
Summary
Income Statement
74
Positive
Balance Sheet
46
Neutral
Cash Flow
63
Positive
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 15.01B | 14.27B | 12.83B | 11.64B | 9.36B | 4.88B |
| Gross Profit | 4.47B | 4.16B | 3.27B | 2.82B | 1.26B | -79.47M |
| EBITDA | 3.58B | 3.28B | 2.61B | 2.28B | 3.22B | -2.35B |
| Net Income | 1.68B | 1.46B | 976.97M | 581.83M | 1.34B | -4.65B |
Balance Sheet | ||||||
| Total Assets | 18.71B | 17.64B | 15.25B | 14.67B | 13.21B | 13.29B |
| Cash, Cash Equivalents and Short-Term Investments | 2.59B | 2.17B | 2.01B | 1.85B | 1.35B | 1.12B |
| Total Debt | 8.40B | 8.09B | 7.15B | 7.04B | 6.87B | 10.54B |
| Total Liabilities | 16.78B | 16.30B | 14.54B | 14.23B | 13.18B | 20.36B |
| Stockholders Equity | 1.93B | 1.35B | 723.27M | 450.30M | 42.28M | -7.06B |
Cash Flow | ||||||
| Free Cash Flow | 1.83B | 1.49B | 1.69B | 1.47B | -733.86M | -859.86M |
| Operating Cash Flow | 3.57B | 3.26B | 3.11B | 2.26B | 96.80M | -184.10M |
| Investing Cash Flow | -1.65B | -1.71B | -1.17B | -659.50M | -748.96M | -542.65M |
| Financing Cash Flow | -1.59B | -1.41B | -1.56B | -1.15B | 854.96M | 109.64M |
LATAM Airlines Group SA Sponsored ADR Technical Analysis
Neutral
50.15
Price Trends
53.32
Negative
51.50
Positive
52.10
Positive
Market Momentum
-0.88
Positive
37.98
Neutral
9.43
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For LTM, the sentiment is Neutral. The current price of 50.15 is below the 20-day moving average (MA) of 53.44, below the 50-day MA of 53.32, and below the 200-day MA of 52.10, indicating a neutral trend. The MACD of -0.88 indicates Positive momentum. The RSI at 37.98 is Neutral, neither overbought nor oversold. The STOCH value of 9.43 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for LTM.
LATAM Airlines Group SA Sponsored ADR Risk Analysis
LATAM Airlines Group SA Sponsored ADR disclosed 51 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
UnderperformOutperform
Sector (55)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
78 Outperform | $5.85B | 8.23 | 26.01% | 4.87% | 9.30% | 16.70% | |
77 Outperform | $58.26B | 14.38 | 19.33% | 0.91% | 10.28% | -12.67% | |
70 Outperform | $40.11B | 11.32 | 22.50% | ― | 8.48% | 6.74% | |
64 Neutral | $15.37B | 9.17 | 126.90% | 3.05% | 16.19% | 62.18% | |
58 Neutral | $22.31B | 27.09 | 11.27% | 1.60% | 9.46% | 137.74% | |
55 Neutral | $6.65B | 3.83 | -15.92% | 6.20% | 10.91% | 7.18% | |
46 Neutral | $10.21B | -31.16 | 8.29% | ― | 7.53% | -157.37% |
* General Sector Average
LTM
LATAM Airlines Group SA Sponsored ADR
52.76
10.77
25.65%
CPA
Copa Holdings
141.22
37.60
36.29%
DAL
Delta Air Lines
87.44
36.84
72.82%
LUV
Southwest Airlines
44.97
15.72
53.74%
UAL
United Airlines Holdings
121.33
36.76
43.47%
AAL
American Airlines
15.27
4.24
38.44%
LATAM Airlines Group SA Sponsored ADR Corporate Events
LATAM Airlines Expands June Capacity and Launches São Paulo–Brussels Route
Jul 10, 2026
In June 2026, LATAM Airlines Group increased consolidated passenger capacity by 7.5% year-on-year, led by a 9.1% rise in international operations and mid-single-digit growth in domestic markets in Brazil and across Chile, Colombia, Ecuador and Per...
LATAM Airlines Calls August Shareholder Vote on New Share Repurchase Program
Jul 8, 2026
LATAM Airlines Group S.A. is a major Latin American airline based in Santiago, Chile, offering passenger and cargo services across domestic and international routes. The company’s scale and multi-market presence make it an influential player...
LATAM Airlines Lifts Passenger and Cargo Volumes in May 2026 as It Reopens Key Routes
Jun 8, 2026
In May 2026, LATAM Airlines Group transported 7.2 million passengers, up 5.0% year on year, as consolidated capacity rose 10.8% on strong international growth and increased domestic supply in Brazil and Spanish-speaking countries. The group also r...
LATAM Airlines Grows April Traffic and Capacity Despite Slight Load Factor Decline
May 12, 2026
In April 2026, LATAM Airlines Group transported 6.9 million passengers, up 2.8% year-on-year, as consolidated capacity rose 8.3%, led by an 11.6% expansion in international operations and continued growth in domestic markets. Consolidated traffic ...
LATAM Airlines Files Q1 2026 Interim Financial Statements with U.S. SEC
May 5, 2026
On May 5, 2026, LATAM Airlines Group S.A. filed a Form 6-K with the U.S. Securities and Exchange Commission, submitting its interim consolidated financial statements for the period ended March 31, 2026. The filing, signed by Chief Financial Office...
LATAM Airlines Posts Record 1Q 2026 Results and Deepens Delta Partnership
May 5, 2026
LATAM Airlines Group reported record first-quarter 2026 results on May 5, 2026, delivering an adjusted operating margin of 19.8% and net income of US$576 million, supported by 10.4% capacity growth and strong demand, particularly in international ...
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.